No one doubts that the coronavirus has created a healthcare tsunami. Donald Trump has no answer. While progressives assert that COVID-19 necessitates the creation of a single-payer system, Joe Biden demurs. So how could he reconfigure our dysfunctional healthcare system to meet this unprecedented challenge?
The politics are simple; the policy damnably complex. So I consulted Dr. Don Berwick: as the former administrator for Medicare and Medicaid under Barack Obama and advisor to Elizabeth Warren, among others, he has plumbed the system in depth.
Easiest to grasp is our failure: despite the improvements wrought by the Affordable Care Act, millions lack adequate healthcare. This is a social tragedy which, in a pandemic, becomes a public health crisis which endangers us all.
Regardless of ideology, one cannot make a positive argument for a healthcare system which is arbitrary, wasteful, and corrosive to social stability. Roughly 28 million people remain uninsured: at least 50 million more are underinsured. For them, disease or accident are trapdoors to familial and fiscal ruin.
This labyrinth consumes 18 percent of GDP—reflecting unnecessary expenditures, excessive administrative costs, and expensive private insurance. To lower this burden, other advanced countries spend two dollars to address the underlying social conditions which compromise health—not simply lack of access to primary care, but factors like food and housing insecurity—for every dollar they spend on healthcare.
Not America: Our ratio is $0.90 on underlying social conditions for every dollar spent on actual healthcare. The result is ballooning costs for healthcare itself. Hospitals are overtaxed; public health agencies underfunded; minorities and the poor underserved. We dispense medical care through a class system – favoring the affluent and those with employer-based insurance over the self-employed and less fortunate—often with lethal results.
The Trump administration has worsened these disparities. Obamacare reduced the uninsured by 22 million, principally by expanding access to Medicaid—the safety net for poorer Americans—and creating healthcare exchanges which provided affordable and reasonably comprehensive healthcare insurance for those who could not otherwise obtain it. By undercutting both, Berwick told me, Trump raised the total number of uninsured by 6 million—a figure which keeps rising.
Further, Trump has attempted to repeal Obamacare altogether, including its protections for those with pre-existing conditions—first, through legislation, then by asking the Supreme Court to invalidate the law.
In this environment COVID-19 will breed catastrophe. The uninsured are more vulnerable. Millions will lose their private insurance; many will be unable to afford COBRA payments. Some who may have the virus won’t seek treatment. Inevitably, the least advantaged will suffer most.
This must change. Here is a potential reform agenda through which Biden could dramatically improve our healthcare system and, therefore, our response to COVID-19.
Under Medicaid, individual states set eligibility requirements. To expand coverage, the ACA required states to include residents with incomes below 138 percent of the federal poverty line—for whom the federal government would initially cover 100 percent of the additional cost.
But after the Supreme Court ruled that the federal government could not mandate compliance, 14 states refused to participate. Trump further weakened Medicaid through work requirements and copayments.
Biden could induce all states to expand Medicaid by permanently guaranteeing a 100 percent federal subsidy. As COVID-19 drives up unemployment and makes more people poor, this becomes absolutely essential.
Strengthening Healthcare Exchanges
The ACA created exchanges to provide affordable private insurance for millions. States could rely on the federal exchange, as 38 of them did, or establish their own.
For participating insurers, the law provided standards of adequate coverage. Between 138 percent and 400 percent of the poverty line, the federal government would supplement premiums on a sliding scale. Trump weakened these protections by lowering the criteria for adequate care – effectively licensing junk insurance policies – and by making it harder for people to find and use the exchanges.
Biden should re-fortify the criteria for adequate care, and increase coverage by including families who make up to 600 percent of the poverty line – which currently means income of $26,000 for a family of four.
A Medicare Public Option
Medicare provides two choices.
Traditional Medicare entitles seniors to buy into a federally-run healthcare insurance program. This licenses government to control costs by setting compensation for physicians and hospitals. It guarantees access to healthcare while reducing administrative costs to 3 percent of expenditures—a significant reduction in overhead.
Medicare Advantage allows seniors to use their benefits to buy private insurance. This foregoes setting compensation or lowering administrative costs—which are capped at 15 percent.
The public option could offer Traditional Medicare for all. And anyone without another source of insurance could be automatically enrolled.
This would likely complicate the distribution of actuarial risks: If more sick people choose Medicare, its cost may rise as the premiums for private insurance fall. But this is not an argument for the status quo: Nearly 80 million Americans are bereft of decent healthcare; in a pandemic, this spreads risk to everyone.
Subsidizing COBRA Payments
COBRA allows the newly-unemployed to keep their employer-based insurance coverage for a limited time. But it can be prohibitively expensive: the COBRA premiums average $7,200 a year for individuals, and over $20,000 for families. Moreover, the newly unemployed pay 100 percent of the cost themselves and, in many cases, must use taxable dollars to do so. COVID-19 will push millions of additional people into COBRA – many of whom will be unable to afford it.
The remedy? Subsidize 100 percent of COBRA payments for the fired or furloughed.
Paid Sick Leave
This prevents sick people from choosing between protecting their health—and the health of their coworkers—and getting paid. COVID-19 has upped the stakes. At the societal level it is much more cost-effective to pay potentially infected workers to stay home rather than spread the virus throughout their workplace.
Other measures are straightforward: Directly subsidizing overwhelmed hospitals. Increasing expenditures to fortify our public health system at the federal, state, and local level. Expanding programs to address the social causes of ill-health, while prioritizing poor and minority populations. Improving our dismal healthcare for the incarcerated.
Straightforward doesn’t mean simple, or easy to enact. All of this would cost money, which would mean raising taxes. But our current healthcare system is a ruinous patchwork of failure: a drag on our economy, a financial sinkhole for too many individuals, and the engine of glaring inequities which immiserates its victims and undermines our societal and public health.
COVID-19 has made the morally unacceptable logistically unsustainable.
By planning comprehensive change, Biden can maximize his chances of winning.
By winning, he can save lives.