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Temporary gifts to private insurance. That’s reform?!

March 5, 2021

Topics: Quote of the Day

By Sarah Kliff
The New York Times, March 5, 2021

Democrats spent much of the 2020 presidential primary debating the best way to expand public health insurance. They sparred over whether to enroll everyone in public coverage — the preferred policy of Senator Bernie Sanders — or to give everyone a choice to do so, the public option plan that President Biden supports.

The candidates repeatedly proposed a future in which private insurers play a diminished role in the American health system — or no role at all.

But the first major legislation of the Biden administration, if it passes in the Senate, moves in the opposite direction: It proposes spending billions to expand private health insurance coverage to millions more Americans.

The American Rescue Plan, a $1.9 trillion stimulus package that the House passed last week, would increase government subsidies to health insurers for covering recently laid-off workers and those who purchase their own coverage.

The decision to start with subsidizing private insurance shows how it can often be the path of least resistance when legislators want to expand coverage. The changes can slot neatly into a pre-existing system, and tend to garner support from the health care sector (which benefits).

The American Rescue Plan spends $34 billion expanding the Affordable Care Act subsidies for two years. The changes would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees.

The stimulus package also subsidizes private health insurance premiums for newly unemployed workers. The legislation that the House passed would cover 85 percent of COBRA premiums through September.

These policies have moved forward easily and with little opposition.

But some progressives have questioned the decision to route patients into private health plans, which will cost the government more because of the high prices they pay for care.

“I don’t think this was the most efficient way to do this,” said Pramila Jayapal, a Democratic congresswoman from Washington State, who is the lead sponsor of the House’s Medicare for All bill. She proposed legislation that would have allowed unemployed Americans transition to Medicare rather than staying on their former employers’ plans. This did not move forward.

In recent years, Democrats have increasingly embraced the idea of a large expansion of public health benefits. The public option would give all Americans the option to sign up for a Medicare-like plan, and a “Medicare for all” program would move everyone to a government health plan.

Polling shows public support for each idea also going up, with the public option tending to rank more favorably than Medicare for all.

In coming years, Democrats will probably confront more decisions about how to expand coverage. The new Affordable Care Act subsidies expire at the end of 2022, setting up a figurative cliff in which premiums would go back up if Congress did not act.

Democrats could use the moment to make those changes permanent, further solidifying the role of private health insurance. If enrollees find themselves satisfied with their increasingly subsidized plans — if they perceive the coverage as more affordable because the government pays a bigger share of the tab — the urgency to expand public coverage may lessen.

“It’s revealing that they’re sun-setting the expansion of subsidies, and not dealing with the longer-term challenge of how do you finance this,” Yale Professor Jacob Hacker said. “Their plan to bolster the A.C.A. is the path of least resistance, but it’s a path that only takes you so far.”



By Don McCanne, M.D.

Where is the roar?

Our health care system is the most expensive in all the world and yet in many regards performs poorly compared to other Western nations. Many of us supported a single payer, improved Medicare for All which would have repaired most of the defects in our system.

With a new administration we should expect great strides toward a high performance system. So what are we getting? Only more of the same and with a sun-setting provision at that. Should they enact a public option it would be only one more player in our fragmented, dysfunctional system of financing health care. Most of the advantages of a single payer Medicare for All are possible only if it is a single program and the other players, including the private insurers, are eliminated.

But no. We are attempting to enact a temporary program that would leave us no better off when it is terminated. We can’t just sit around until the program goes away. And further, we can’t just passively accept the fact that private insurance is here to stay and we’ll never have health care justice. It is time that they hear us roar, loud and clear.

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About the Commentator, Don McCanne

Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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