By Edwin Quinabo
Stay-at-home orders to contain the spread of the coronavirus (COVID-19) pandemic quickly took an immediate and dramatic toll on businesses. Last week a record-breaking 6.6 million Americans filed for unemployment benefits; and experts predict massive layoffs could get worse.
Not only have Americans lost their jobs, the double whammy is they also stand to lose their healthcare insurance at a perilous time when having coverage is critical.
Health insurance tied to employment has always been precarious — and just one of the major misgivings of the current system, reformers point out. Have a job, have insurance; lose your job, lose your insurance. That’s hardly secure. The logic is plain and simple to follow; but oddly, not convincing enough for some who resist large-scale changes to the U.S. system.
But as the COVID-19 crisis exposes new vulnerabilities, and as public health becomes a priority unlike never before, there could be added urgency for reforms to health care.
Even before the COVID-19 outbreak, health care has emerged as the top policy issue for voters. Democrat presidential candidates have favored one of two versions of Universal Healthcare: 1) Medicare for All, a true single-payer system; or 2) the Affordable Care Act (ACA or Obamacare) with an added Public Option.
Could there finally be a political will for Universal health care in the U.S (the only industrialized nation not to offer it to its citizens)?
Stanley Cabuslay, 43, was let go from one of the major hotels in Waikiki during the ongoing COVID-19 crisis. He’s not one of the lucky ones in his company who was just furloughed and will be recalled to work when the economy and crisis get better. The Waipahu native worked in the hotel industry for all his life since age 18, but only worked for this hotel a little over 5 years. It is the first time he has filed for unemployment.
Stanley was able to sign up for temporary health insurance with the state but is worried what will happen after it expires. The state of Hawaii allows qualified unemployed workers to receive temporary health insurance immediately after losing their jobs or being furloughed, but many other states do not.
“I’m still far away from retirement. So it’s not like I can rely on Medicare any time soon. And when hotels start rehiring, there will be a rush for jobs with all the hotel workers who lost their jobs. The guys on furlough are the first to be called back. I don’t think the hotels will hire lots of people in the beginning because tourism will get better, but not fast.
“Because my wife was on my health insurance, and now it’s gone, I worry about her. I never really thought about things like health insurance for everybody, like what the politicians talk about. I felt, no need worry, because I have a stable job and get my insurance from my company. Now I am in this situation – and kinda shame because I feel like I let my wife down, even if it’s not my fault – I think it’s a good idea what these politicians are saying about everybody getting health insurance.
“In that situation, no need worry about losing your health insurance if you lose your job. It would be good to know at least my wife will always be safe and covered if she gets sick,” said Cabuslay.
Democrats have had bitter, contentious battles through the primary season over which version of Universal healthcare is best suited for the nation. Medicare for All and the ACA with Public Option have considerable differences and not interchangeable.
Medicare for All
Progressive Democrats – most prominently Sens. Bernie Sanders and Elizabeth Warren – have pushed for the Medicare for All model. It is a true single-payer healthcare system that would provide everyone living in the U.S. comprehensive health care coverage.
Under Medicare for All, there would be no networks, no premiums, no deductibles, no copays, no medical bills, period. Prescription drugs, lab and diagnostics services, mental health, ambulatory care, hospital stay, rehab services, and medical equipment would be included in the Medicare coverage, as well as dental, hearing, and vision.
How would government afford paying for Medicare for All? Both Sanders and Warren supported an “extreme wealth” tax on billionaires. Sanders spoke more openly than Warren about increasing income taxes on Americans (besides a wealth tax) to also help pay for Medicare for All.
A single-payer system means that government would run the one insurance coverage plan for all Americans. Medicare for All advocates claim having a single-system would dramatically reduce medical administrative costs by as much as 30 percent, which would also help to make the ambitious program more affordable.
As a not-for-profit entity, the government would not be pressured to clear high profit margins or answer to investors, which savings would also keep health care more affordable.
The single-payer aspect of Medicare for All is what differentiates it from other universal health care systems proposed. The term “Universal” coverage means that everyone will have insurance, but not necessarily mean that government would be the sole insurer.
The main criticism behind the single-payer system is that all Americans must opt into the system and they cannot keep their existing plan. This is a political hard sell as many Americans are resistant to major changes. But once established, Americans would be able to visit any doctor of their choosing. An added plus, there would be no waiting for insurance approval on procedures.
Patients would not be billed by their doctor or provider. Physicians would bill the government and money would be taken from one central fund.
The biggest advantage under Medicare for All is patients would ultimately pay less in medical insurance, procedures and prescription drugs than under the current system, even though income taxes would go up. There would be a net savings from the current system, Medicare for All advocates claim.
Under Medicare for All, employers would be lifted of the burden of offering health insurance to their employees, which could free up the resources of businesses for other operational costs.
Medicare for All has broad support among Americans in most polls. According to RealClear Opinion Research, 82 percent of Democrats support Medicare for All, 50 percent among Independents, and 50 percent among Republicans.
“We know that health care was a primary driver of success for House Democrats in 2018, but what this poll shows is the importance this issue still holds in the 2020 cycle,” said John Della Volpe, polling director for RealClear Opinion Research.
But Medicare for All has been opposed fiercely by the private health insurance and pharmaceutical giants that have flexed their political muscle to brand the system as unrealistic, too costly, un-American, and socialist. Their lobbying efforts and campaign donations to politicians – to the tune of billions – have been successful in fending off real changes to the American health care system for decades, despite millions of Americans finding the health costs increasingly unaffordable.
The single-payer model has been floating around for decades even before it has been linked at the hip to Sanders or Warren. Political analysts believe even if Sanders fails to get the Democratic nomination, it is a movement that will continue.
Affordable Care Act (ACA or Obamacare) with Public Option
ACA is touted as universal healthcare, but experts agree that it is more of a vehicle towards achieving universal healthcare.
It is not a single-payer system. It is offered as an option to Americans who cannot afford traditional private health insurance. Under this system, private insurers would still exist.
Moderate Democrats, including presidential front-runner former Vice-President Joe Biden, aims to expand ACA and get the estimated 20-million plus still uninsured, insured under ACA.
ACA was made into law on March, 2010 and was successful in raising the numbers of insured. In 2012, there were 45.6 million people in the U.S. without health insurance. By 2016, that number is estimated at 27.3 million.
Since President Donald Trump took office, ACA-enrollment has seen a drop and the number of uninsured rose from 27.3 million in 2016 to 28.6 million in 2018.
ACA, because of its longevity, is seen as more reliable, at least compared to the untested Medicare for All model. ACA managed to pass Constitutional muster when challenged in the Supreme Court. But it is still considered vulnerable, and nearly suffered a fatal blow when Trump and the Republican-controlled House and Senate attempted to repeal it. One Senate vote saved ACA from being axed. ACA is also being challenged in the courts once again and could be taken up after the elections, by this time, a conservative-majority Supreme Court.
On the 10th anniversary of the ACA, Sen. Mazie Hirono called on the Trump administration to abandoned his efforts to repeal the law. She said, “The American people should never have to worry that their President will pull their health insurance out from under them, but they especially shouldn’t have that fear during a pandemic. The Affordable Care Act gives millions of Americans the peace of mind and the financial means to access health care, ensuring personal health and promoting public health. It’s cruel to continue asking the courts to invalidate the ACA and pursuing your various other approaches to take away health care protections in the midst of the deadly COVID-19 outbreak.”
ACA is far from the guarantees proposed in Medicare for All. But it has improved health care in significant ways – insurance companies can no longer deny coverage or charge higher premiums to people with pre-existing conditions and young people can stay covered by their parents’ plan until age 26.
The biggest criticism of ACA is it hasn’t had an effect in curbing healthcare costs and prescription drugs to those who are not enrolled in the program. Premiums, co-pays, and deductibles from private insurers are still considered unaffordable to millions of Americans. Hospital care, especially long-term care, is still driving Americans into bankruptcy.
Critics of ACA say what good is universal coverage (getting most Americans insured) if the cost remains unaffordable.
To address lowering cost, this is where the new “Public Option” feature of ACA is being touted this election cycle. Under the Public Option, Americans would be able to enroll in a government-run health insurance agency or insurance plan to compete alongside private insurers.
The plan would be available on the ACA exchange already set in place. Government’s massive resources — and that it would not be a for-profit entity — in theory could lower health care for enrollees of the Public Option. Government would have leverage to negotiate lower rates across the board.
But again, it’s unclear how outside of the Public Option feature, the overall cost of healthcare would be reduced.
ACA, plus Public Option’s main selling point is that people who are content with their current health insurance can keep it. ACA is optional to sign up for.
The devil is in the details, the saying goes. Just as supporters for Medicare for All have been criticized for not being clear on how it would be paid for, proponents of the public option plan also has not delved into the nitty gritty details.
“The American people should never have to worry that their President will pull their health insurance out from under them, but they especially shouldn’t have that fear during a pandemic. The Affordable Care Act gives millions of Americans the peace of mind and the financial means to access health care, ensuring personal health and promoting public health. It’s cruel to continue asking the courts to invalidate the ACA and pursuing your various other approaches to take away health care protections in the midst of the deadly COVID-19 outbreak.”—Sen. Mazie Hirono
Employer-sponsored and Individual buy-in insurance
Republicans have not offered a comprehensive health care option except to favor repealing the ACA. Not offering a replacement can only suggest that the default would be the acceptable, better plan, to them.
What is the default? Employer-sponsored insurance and Individual buy-in insurance – basically private insurance. About half of all Americans who have insurance, more than 150 million people, get their health insurance through their jobs, private insurance.
The biggest drawback of this system is cost, which is rising at a faster rate than inflation — a reason why most people find it harder each year to keep up with. Since 2008, average family premiums have increased 55 percent, twice as fast as workers’ average earnings and three times as fast as inflation.
The cost of annual premiums for a family plan cost almost $20,000 a year. Of that total, workers contribute roughly $5,550 and employers pay for the rest. Deductibles have also risen swiftly, according to the Kaiser Family Foundation.
Under this system, there are layers upon layers of why cost containment has been unsuccessful. All players in the system point to each other as reasons for why private health insurance is expensive. But the bottom line, is that all players in the system are enjoying healthy profit margins, with the pharmaceutical industry having the highest profit margin levels of all private industries in the U.S.
This system also doesn’t address the millions who are outside of the system, roughly half of Americans – people who do not have employers; people who do not have their own means to buy individual plans for themselves or their family; people who are workers, but do not make enough income; people who have employers, but their employers are not required (in many states) to extend health insurance to their employees; people who are working two or three part-time jobs, none of which offer health insurance.
The rapid rise in cost of health insurance is also putting a strain on small businesses that do offer workers health benefits.
Critics of this system call it a system of the “haves” and “have-nots.”
Those under the system frequently talk about excellent health care and flexibility to choose their doctors and health care providers. The caveat overlooked, though, is they can continue to partake in those services as long as they remain employed in that same company (companies sign up for different programs) and stay healthy. Employees who suddenly become too ill to perform their job duties can be let go. And the security they thought they had is no longer there when they need it most, as well as the coverage extended to their spouse and children.
Medicare is a federal program created in 1965. It provides health insurance for roughly 60 million elderly and disabled Americans. It covers hospitalization, rehabilitation and doctors’ visits, but not vision, hearing, dental and longterm care.
Medicare enrollees pay premiums, have deductibles and typically pay 20 percent of many medical services.
To help with expenses, Medicare enrollees usually buy supplemental Medigap plans from private insurers. As of 2006, Medicare began offering prescription drug coverage — through private insurers that contract with the government. But seniors who have chronic illnesses frequently complain of costs even with the private prescription drug coverage they purchase.
About one-third of Medicare participants are enrolled in Medicare Advantage plans offered by private insurers. Medicare Advantage will cover many areas that the Medicare base coverage (provided by the government) will not, but it will come at additional cost.
Bernie Bernales of Kailua, retired, said he is satisfied with his healthcare coverage. “My health coverage is the group custom Medicare Advantage Plan with prescription drugs, also known as Medicare Part C. It has all the benefits of Medicare Part A (hospital) and Part B (doctor and outpatient care) and extra programs that go beyond the original Medicare Parts A and B. I can choose to see any healthcare provider I want, in and out of network. Added value are: free routine hearing and vision testing, assistance for hearing aids cost and reduced drug prices. Also included are house calls, nurse line, annual physical and wellness visit, virtual visits, silver sneakers, and covered preventive care.”
Seniors opinions on health care coverage vary. Some favor not making big structural changes; some would want government to expand the base Medicare coverage so they do not have to buy supplemental gap insurance, which is increasingly becoming costly.
On the COVID-19 crisis relating to health care, Bernales said, “the low-income, the poor and the homeless are the ones that are most affected. They do not have the resources to pay for extended COVID19 healthcare expenses. It is reported that after being declared well, the patient does not fully recover. Long-term care is needed at home or healthcare facilities. For those with limited resources, full recovery will then be an uncertainty. There must be a plan to take care of the most vulnerable segment of our population.”
Before the COVID-19 crisis polls showed health care, specifically making it more affordable and widely available, was the number one issue for registered voters. Did the pandemic change that or make the issue even more urgent. Only time will tell as the General Election approaches.