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Nothing But a Taxpayer 'Subsidy to Insurers': Democrats Float Plan to Backstop For-Profit Healthcare Industry During Covid-19 Pandemic

"Democrats are doing exactly what insurance companies want by expanding COBRA. We need Medicare for All now."

Speaker of the House Nancy Pelosi, (D-Calif.)., speaks during her weekly news conference in Washington on Thursday, March 12, 2020.

Speaker of the House Nancy Pelosi, (D-Calif.)., speaks during her weekly news conference in Washington on Thursday, March 12, 2020. (Photo: Caroline Brehman/CQ-Roll Call, Inc via Getty Images)

 

House Democratic leadership came under fire Tuesday after it was reported a proposal is now under consideration to backstop for-profit healthcare insurance companies with taxpayer dollars instead of simply opening public programs like Medicare and Medicaid to those laid off or uninsured amidst the coronavirus outbreak ravaging the country.

Under the proposal, first viewed and reported on by Vox, the costs of COBRA—an existing program which allows laid-off and furloughed workers to continue to buy into their employer-provided insurance plan by shouldering all or a large portion of the premiums—would be assumed by the federal government.

According to Vox:

The Worker Health Coverage Protection Act would expand that to 100 percent coverage, both for laid-off workers and furloughed ones. In the case of laid-off employees, these new COBRA subsidies would cover both the employee and employer portions of the premium costs. In the case of furloughed workers, the bill would just cover the cost of the employee’s premiums because the employer would continue to pay in as well.

"It's affordable because if you don't have a job you're going to get significant subsidies," said Rep. Bobby Scott (D-Va.), one of the bill's sponsors and the chair of the House Committee on Education and Labor.

The Democratic Socialists of America said lawmakers should concentrate on solutions that help the American people.

"Democrats are doing exactly what insurance companies want by expanding COBRA," tweeted DSA. "We need Medicare for All now."

The bill's friendliness to the insurance industry was noted as a selling point by Robert Wood Johnson Foundation senior policy advisor Katherine Hempstead. 

"This proposal should be favored by providers, since it will increase their likelihood of receiving higher commercial rates from these workers," Hempstead told Vox. "Also, this is advantageous for insurers that are in the employer market but not the marketplace."

While the proposed legislation would provide a stopgap for the subsequent loss of insurance for some of the newly unemployed during the economic downturn that's come in the wake of the disease, it won't cover everyone. 

As Vox reported: 

Even with generous subsidies, it's important to note the bill won't cover everyone; while 49 percent of Americans get their health insurance through their employer, many people who have been laid off work in restaurants or retail—and smaller businesses don’t necessarily provide insurance to their employees. People who got their insurance through the ACA marketplace, for instance, could be in a tough spot.

Progressives panned the proposal as too little too late and as an unnecessarily complicated giveaway to the private health insurance industry. 

"If you're really concerned about low reimbursement rates for providers, just insure everyone through Medicare and offer a rate multiplier for enrollees under 65," tweeted healthcare advocate Timothy Faust. "All COBRA expansion does is hand out a subsidy to insurers."

David Sirota,  journalist and former top aide to the presidential campaign of Sen. Bernie Sanders (I-Vt.), suggested Democrats could also use Medicaid as an avenue for expanding healthcare access for jobless Americans—if they wanted to.

"The Democrats could push to simply expand Medicaid," said Sirota, "but instead they are pushing new subsidies for private health insurance companies."

As Common Dreams reported, a competing bill introduced Friday by Sanders and Rep. Pramila Jayapal (D-Wash.) would use Medicare to give all Americans no cost healthcare for the extent of the pandemic, effectively shutting out the private health insurance industry and offering relief to all Americans. 

In a statement Friday announcing the measure, Jayapal said there was no excuse to withhold care from anyone during the outbreak for any reason.

"Everyone in America should have guaranteed access to health care, especially during national emergency," said Jayapal.

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