[ Democrats want to pay billions to put Americans on expensive
corporate health insurance plans rather than expand Medicare or create
a public option. It’s a gift to a criminal private insurance
industry that needs to be completely abolished.]
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DEMOCRATS ARE SUBSIDIZING HEALTH INSURANCE PREDATORS  
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Andrew Perez
February 24, 2021
Jacobin
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_ Democrats want to pay billions to put Americans on expensive
corporate health insurance plans rather than expand Medicare or create
a public option. It’s a gift to a criminal private insurance
industry that needs to be completely abolished. _

Bernie Sanders at a Medicare for All Rally., wsj.com

 

Propping up the corporate health insurance industry isn’t cheap or
painless, but for Democrats in Washington, it’s the only way.

Instead of enacting a universal Medicare for All health care system
that would save the United States and its citizens hundreds of
billions of dollars annually
[[link removed]],
temporarily expanding Medicare, or championing a promised “public
option,” Democrats are rallying behind a health care proposal that
will funnel tens of billions of dollars to corporate health insurance
companies, even as they are already experiencing record profits
[[link removed]] and jacking
up premiums
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while continuing
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claims
[[link removed]].

Democrats’ current plan will lower people’s premiums, but only on
a temporary basis. It will also not stop insurers from passing on huge
out-of-pocket costs to enrollees if they need medical care, nor does
it improve the quality of people’s health insurance. Indeed, it will
push people onto state exchanges, where one in six
[[link removed]] in-network
medical claims were denied in 2019.

The proposal would be a boon for the health insurance industry,
which has specifically lobbied
[[link removed]] for
the new subsidies. Health insurers have already seen their profits
skyrocket during the COVID-19 pandemic, since people have avoided
going to the doctor
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which means insurance companies are paying less to providers while
collecting the same amount of premiums.

The Current Plan: Big Cost, Limited Relief

House Democrats’ COVID-19 relief legislation, modeled on President
Joe Biden’s “American Rescue Plan,” would increase subsidies
available to people buying health insurance on the Affordable Care Act
(ACA) marketplace and greatly expand who’s eligible for subsidized
coverage. Americans who don’t qualify for any premium tax credit
today because they earn more than $51,040 (or $104,800 for families of
four) would see their premiums capped
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8.5 percent of their income.

The House language would also provide premium subsidies to Americans
collecting unemployment, and it would subsidize 85 percent of the cost
of COBRA coverage to help people who were laid off during the pandemic
keep their employer-sponsored insurance plans. Labor unions want to
see COBRA subsidized at 100 percent, as Biden’s plan called for.

 

The proposed COBRA subsidies only run through September
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while the ACA tax credit expansion lasts through the end of 2022, so
the relief may only be temporary. Still, these measures will cost
more than $52 billion
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according to the Joint Committee on Taxation
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The Congressional Budget Office projects
[[link removed]] 1.3
million new people will gain insurance coverage under these
provisions, meaning that millions of Americans will remain uninsured
during a historic, deadly pandemic. There were nearly 29 million
uninsured
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in the United States in 2019, before COVID caused widespread job
losses.

The short-term nature of the subsidy measures ensures lawmakers have
to come together in the future to renew them so that people don’t
experience extra pain down the line — a tricky prospect, given that
Republicans have spent much of the past decade working to repeal the
ACA.

Expensive Premiums and Huge Out-of-Pocket Costs

The individual insurance plans currently available on the ACA and the
employer-based insurance plans that are maintained under COBRA are
expensive.

Health insurance coverage purchased through the ACA marketplace costs
83 percent more than Medicaid coverage and leaves patients with ten
times the amount of out-of-pocket costs, according to a study
[[link removed]] published
last month in the _Journal of the American Medical Association_.

The researchers found that ACA marketplace plans cost significantly
more than Medicaid because private insurers pay “higher prices for
the same services.” Research from RAND Corporation shows that
hospitals often charge people with employer health insurance
plans two or three times as much
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or Medicaid will pay.

The deductibles associated with private insurance plans are so steep
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many Americans who have insurance often can’t afford to go to the
doctor.

The average bronze plan deductible on the ACA marketplace was nearly
$5,900 in 2019. While poorer enrollees may qualify for cost-sharing
reductions
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their out-of-pocket expenses, the reduced out-of-pocket maximums that
individuals are expected to pay range from $2,850 to $6,800, depending
on their income level.

Meanwhile, insurance companies are denying 17 percent
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in-network health claims made by patients on ACA plans.

The new ACA subsidies wouldn’t affect
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living in poverty in states where Republican politicians have refused
to expand Medicaid, as those Americans are not eligible for the ACA
marketplace plans. House Democrats’ legislation would offer
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holdout states more federal funding to expand Medicaid, but it’s
unlikely Republicans will suddenly decide to take their boots off
their constituents’ necks.

The new COVID bill will pay part of some Americans’ premiums.
Overall, it will do very little to lower the country’s health care
costs, which are the highest in the world, as insurance companies
enjoy outsize profits thanks to a pandemic. The government will just
pick up the tab for a bit more of those costs. People will still face
big out-of-pocket costs if they get sick. Insurance companies will
continue denying claims.

On the other hand, according to the Congressional Budget Office,
Medicare for All legislation in Congress could ultimately save $650
billion annually
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while covering all Americans and ensuring they no longer have to worry
about expensive deductibles or co-pays or narrow insurance networks
that act as barriers to care.

Instead of propping up health insurers, Democrats could pass existing
legislation
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enact an emergency Medicare for All program, or Biden could try to
use executive authority
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to him under emergency provisions in the ACA to expand Medicare during
the COVID-19 pandemic.

Or they could be discussing the creation of a public health insurance
option, which Biden campaigned on as an alternative to the Medicare
for All plan favored by Senator Bernie Sanders.

“Closest Match to the Biden Campaign”

Democratic senators Michael Bennet of Colorado and Tim Kaine of
Virginia last week released
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new “Medicare-X Choice Act” legislation, which is meant to
resemble Biden’s public option plan.

“We think what we’re introducing is the closest match to the Biden
campaign,” Kaine said, according to NBC News
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After the primary, a Biden-Sanders joint task force negotiated a more
robust public option pledge than what the Biden campaign had been
promising, and the Democratic National Committee platform included a
similar measure.

The Biden-Sanders task force recommendations outlined a public option
plan available to “all Americans.” It further stated
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The public option will provide at least one plan choice without
deductibles, will be administered by the traditional Medicare program,
not private companies, and will cover all primary care without any
co-payments and control costs for other treatments by negotiating
prices with doctors and hospitals, just like Medicare does on behalf
of older people.

The Democratic National Committee’s 2020 platform said
[[link removed]]: “Democrats
will also make available on the marketplace a public option
administered through the Centers for Medicare and Medicaid Services
(CMS) which includes a platinum-level choice, with low fees and no
deductibles.”

The Bennet-Kaine legislation includes no mention of deductibles, and
initially, only people living in areas with limited insurance options
would be allowed to sign up for their public option. The program would
open up to all Americans by 2025.

While the public option proposal is more scaled back than the party
promised, it probably won’t be enacted into law anytime soon,
either.

Letting Public Option Wither

Senate Democrats haven’t committed to ending the legislative
filibuster, which means they will need to use the budget
reconciliation process to pass legislation with fifty-one votes,
instead of the sixty votes they will likely need to break a Republican
filibuster.

It’s hard to imagine any Republicans supporting a public option
plan, no matter how watered down it gets, so Democrats would likely
need to pass such a plan using reconciliation.

Congress typically only uses the budget reconciliation process once
per year
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though Democrats can use it at least twice this year, because Congress
didn’t pass a budget last year. Democrats are using reconciliation
now to pass Biden’s first COVID relief bill.

Sanders, the new Senate budget committee chairman, appears ready
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reconciliation more frequently — which could at least remove a
process roadblock to enacting big bills during an economic emergency.

 

Still, the Bennet-Kaine public option plan could sit for some time if
it’s not in the current aid bill. Expect Democrats to say they are
fine-tuning the legislation and gathering stakeholder input, while the
health care industry unleashes a propaganda campaign to kill it.

Between 2009 and 2010, a powerful health insurance lobby, America’s
Health Insurance Plans (AHIP), secretly
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than $100 million to the US Chamber of Commerce to pay for an advocacy
campaign to destroy support for the public option route. It worked:
Democrats removed the public option from the ACA, which is why
politicians are now talking about it as a potential compromise measure
a decade later.

An AHIP-led front group called the Partnership for America’s Health
Care Future, which spent $4.5 million
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ads opposing Medicare for All last year during the Democratic
presidential primary campaign, has already signaled its opposition to
the scaled-down public option proposal.

“The Partnership for America’s Health Care Future believes that
every American deserves access to affordable, high-quality health
coverage and care, and the best way to achieve this is to strengthen
our current system — not start over by creating unaffordable,
one-size-fits-all government health insurance systems like
Medicare-X,” the group said
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a statement last week.

According to Federal Communications Commission records, the
partnership recently reserved TV spots in Montana
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where Democrats would need yes votes from senators Jon Tester and
Angus King for a public option, as well as in the Washington area
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It’s easy to see the public option languishing, as health insurers
use their excess profits to pulverize the plan.

In the meantime, Democrats will have the government deliver more money
to the corporate health insurance industry to put more Americans on
insurance plans they can’t afford to use.

_Andrew Perez is a writer and researcher living in Maine._

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