COVID-19: Democrats’ Plan Denounced as Gift to Health Insurers

Progressives who advocated for Medicare expansion are dismayed by Democrats’ embrace of a policy pushed by the insurance industry and big business, Jake Johnson reports. 

By Jake Johnson
Common Dreams

For weeks, progressive lawmakers and advocacy groups pressed the House Democratic leadership to support an emergency expansion of Medicare coverage to the tens of millions of people who have lost their jobs and their employer-provided health insurance during the coronavirus pandemic.

But in their newly introduced 1,815-page coronavirus relief bill, House Democrats opted instead for a more expensive alternative that progressives and public health experts warn would provide inadequate care while lining the pockets of the insurance industry, which is already making a killing during the Covid-19 crisis.

The Heroes Act proposes fully subsidizing COBRA, an existing health insurance program that allows laid-off or furloughed workers to remain on their employer-provided insurance plans. Under normal circumstances, COBRA is extremely expensive for individuals — recipients have to cover both their own and their employer’s premium payments — but the Democratic plan would cover 100 percent of the premium costs through next January.

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COBRA expansion has the backing of a bizarre alliance of interests, including big business and some labor unions, but critics say the proposal is wildly inefficient and does not come close to matching the scale of the nation’s current healthcare crisis.

Subsidization of private COBRA plans would “leave so many uninsured, and many more burdened with the high-deductibles of these plans,” said Adam Gaffney, a critical care doctor and president of Physicians for a National Health Program, an advocacy group that supports Medicare for All.

“We’re facing the biggest economic crisis since the Great Depression—subsidizing the insurers is not going to cut it,” Gaffney said. “We need emergency Medicare expansion for the uninsured, and coverage of out-of-pocket costs for the insured, now.”

People on meal-distribution line in northern Manhattan during Covid-19, May 9, 2020. (flyingoffthehandle, @Uptowncollectiv, via Twitter)

As Akela Lacy and Jon Walker reported for The Intercept on Tuesday, COBRA expansion “has gained traction among private insurers as they lose customers at an alarming rate, and especially among hospitals because they often charge people with employer insurance more than twice as much as those with Medicare or Medicaid.”

“That’s why, for the federal government, fully subsidizing COBRA on a per person basis will actually be one of the most expensive ways for the federal government to keep coverage numbers up and also one of the worst ways to target it.”

“While fully subsidizing COBRA has the popular appeal of simplicity,” Lacy and Walker wrote, “it is inefficient, unfair, poorly targeted, could end up hurting some people, and does not even work toward closing the gaps in the nation’s health care system. It is inequitable because much more help will go to people who previously made higher incomes.”

“Not only would health insurance corporations make massive profits off the plan—profits that come at the cost of the American taxpayer—but it would still leave tens of millions uninsured or underinsured.”

Progressives who advocated for ambitious Medicare expansion voiced dismay after discovering that Democratic leaders who directed the crafting of the Heroes Act—pitched as a bold, even “Rooseveltian,” solution—decided to propose a policy pushed by the insurance industry and big business.

Warren Gunnels, staff director for Sen. Bernie Sanders (I-Vt.), tweeted Tuesday that “subsidizing COBRA is a massive giveaway to health insurance CEOs that will leave tens of millions behind.”

In a statement, People’s Action Director George Goehl said that “while including funds to keep people from losing their insurance due to job losses shows concern for people’s health needs during a pandemic, the best solution would be to enroll the uninsured into Medicare so that we support people with a public program instead of handing more money to private insurance companies who put profit over people’s actual health.”

Last month, Sanders and Rep. Pramila Jayapal (D-Wash.), co-chair of the Congressional Progressive Caucus, introduced legislation that would use Medicare to cover all healthcare costs for the uninsured and all out-of-pocket costs for those on private insurance plans for the duration of the Covid-19 crisis.

In an April 28 op-ed for Politico, Sanders made the case for his and Jayapal’s plan and warned that subsidizing COBRA would “be both expensive and ineffective.”

“Not only would health insurance corporations make massive profits off the plan—profits that come at the cost of the American taxpayer—but it would still leave tens of millions uninsured or underinsured,” Sanders wrote. “And during this pandemic, a lack of insurance means more Covid-19 transmissions and more deaths. Expanding COBRA during the pandemic would do nothing to cover those who already lacked insurance.”

“Allowing Medicare to cover out-of-pocket health care expenses during the pandemic isn’t just the right thing to do,” Sanders added, “it’s actually less expensive for taxpayers because, unlike COBRA, the government would not be covering the cost of expensive monthly premiums to insurance corporations.”

Jake Johnson is a staff writer for Common Dreams. Follow him on Twitter: @johnsonjakep

This article is from Common Dreams.

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10 comments for “COVID-19: Democrats’ Plan Denounced as Gift to Health Insurers

  1. May 18, 2020 at 21:04

    When in hell are more people going to awaken to the fact that “for-profit” healthcare is the crux of the problem? How are so many working people NOT insulted that they are seen as nothing more than generators-of-profit for the richest people in the country? That the value of their existence is seen strictly in monetary-terms? That there is a very real ideology that says, “You must sacrifice your life on the altar of Profit, else you are useless scum.”? Are so many U.S. Americans that dense?

  2. Mike
    May 18, 2020 at 10:46

    Time to leave the two (really one party) system behind. There’s a green party and libertarian party out there which gets no coverage on major media channels. To introduce REAL change eventually, we must not merely abstain from voting but, vote for reps from other parties not covered by media until they become true challengers to that truly one party system we have.

  3. DH Fabian
    May 15, 2020 at 12:54

    Liberals have been calling for “Medicare for All,” sans Medicaid. M4A is n0t free, universal health care coverage. Millions of seniors, for example, rely on dual benefits, Medicare/Medicaid. Medicare for All, without Medicaid, is some coverage for some. Democrats, of course, maintain the lead in dismantling the “safety net.”

    • DarcieD
      May 18, 2020 at 21:07

      No “liberals” have been calling for Medicare for All. It’s progressives and democratic socialists who are demanding M4A. And health care providers: two of the largest physician groups, and the largest national nurses union, National Nurses United, as well as state nurse associations – ALL calling for M4A.

      Sounds like you have never seen, read, read about, or listened to any video about M4A. Why would you comment on something yhou know nothing about, and got everything wrong on? I’m not going to do your homework for you, just like I don’t do it for my grad students. ………..Yes, health care provider here.

  4. Vera Gottlieb
    May 15, 2020 at 10:02

    And so it will continue to be until the end of time: pretending to help the disadvantaged while strongly helping the “advantaged”.

    • DH Fabian
      May 15, 2020 at 12:55

      For the past quarter-century, Dem Party loyalists/liberals have been all for the currently employed alone, within our capitalist system.

  5. John R
    May 15, 2020 at 09:23

    OK – the Dems sell out yet again because that’s who they are and how they operate. Now, try to bring this sell-out story up in conversation (when we are OK to gather again) with your D-friends and you will be met with a stony silence and glazed over look of disinterest that intimates that it is you who is the problem for even trying to bring up important issues. Then they’ll tell you to vote for their lousy D candidates because they are the good guys. (For the record – I have never voted R in my life).

  6. TimN
    May 15, 2020 at 07:29

    Maybe Bernie should ask his Good Friend Joe what he thinks should be done.

  7. Drew Hunkins
    May 14, 2020 at 22:48

    This is the starkest example yet of what the contemporary Democratic Party in America truly is. Despite a pandemic they STILL won’t take to the bully pulpit and advocate for Medicare-for-All, they STILL genuflect to the giant health-industrial-insurance complex, they STILL won’t consider U.B.I.

    The Democratic Party is NOT a progressive party, to urge them to become populist-progressive is like asking a zebra to change its stripes. Pelosi and Schumer are who they are, period. They don’t have to give more than two minutes to hearing some progressive-populist vent b/c the progressive-populists hold no power, we have no muscle in the room, and therefore we can be scoffed at, mocked, ridiculed and dismissed with a flick of the wrist.

    The Third-Worldization of America is on the horizon and many would argue that it’s already here. What you find in virtually every Third World country is a small middle class, a tiny super-wealthy plutocratic class living behind barbed-wire, and a huge impoverished mass. That’s exactly where the U.S. is heading. The norm around the globe is the Third World model I just described, it’s Western Europe and post WWII America that were the anomalies.

  8. anon4d2
    May 14, 2020 at 22:15

    So the Dems sell us all out again to get bribes from the rich.
    Dump the Dems and join a progressive party.

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