The new program, which administration officials said Friday they were still finalizing, reportedly won’t cover non-coronavirus expenses. It also won’t help people who have insurance but face out-of-pocket costs for their coronavirus care.
These and other shortcomings are likely to become bigger problems in the next few weeks as more people develop the illness and rising unemployment leads to more uninsured. The middle of a lethal pandemic is not exactly the best time to have large numbers of Americans afraid to get medical care because of the prospect of high bills.
Still, Trump’s initiative will make a big difference for the uninsured. And it will do so by having the federal government pay their COVID-related costs directly ― which is the kind of thing that Trump and his allies in the Republican Party have been known to attack as “socialism.”
What Trump’s Plan Does And Doesn’t Do
The money for Trump’s initiative, first reported by Stephanie Armour of The Wall Street Journal, will come from a $100 billion allotment for health care providers that was part of the economic rescue package Congress passed and Trump signed a week ago. The funds will go directly to the hospitals that serve the uninsured, covering each patient’s coronavirus-related charges.
In theory, those uninsured Americans won’t have to pay a penny for that care. That’s a big deal, given the potential of hospital charges from COVID-19 care to wallop the average American’s finances ― and to discourage the uninsured from getting care in the first place.
“This should alleviate any concern uninsured Americans may have about seeking the coronavirus treatment,” Trump said Friday.
But the apparent lack of coverage for non-COVID-19 expenses means that somebody with coughs, fever and other symptoms that look a lot like COVID-19 could go to the hospital, test negative and be treated for the flu. That person would be on the hook for those bills.
Depending on the program’s final structure, patients could also owe money to doctors who bill separately from the hospitals where they work.
“Paying hospitals for providing COVID-19 treatment for people who are uninsured will alleviate a financial burden on the institutions and give patients peace of mind, but it’s not the same as providing comprehensive health insurance,” Larry Levitt, executive vice president at the Henry J. Kaiser Family Foundation, told HuffPost.
“Uninsured patients could still face big charges from doctors that bill separately from hospitals, and could end up owing a lot if they seek care believing they have COVID-19 but end up being sick with something else,” Levitt added.
Concern about the uninsured is acute right now because, with record numbers of people losing jobs, millions are losing the insurance they get through their employers. One new estimate, from the research and consulting firm Health Management Associates, predicts that enrollment in job-based coverage could end up more than 30 million lower than it would be if employment were at its pre-pandemic levels.
A large portion of these people will be able to enroll in Medicaid, according to the projection, while others will be able to buy coverage on their own, and possibly qualify for subsidies, through the insurance marketplaces that the Affordable Care Act created. By law, anybody who loses job-based insurance can apply for coverage on one of those marketplaces, even if the annual open enrollment period is over.
But the sheer number of people seeking coverage in the coming weeks will put a tremendous strain on government agencies that oversee health insurance programs, especially because both state Medicaid systems and the insurance exchanges require applicants to demonstrate eligibility, and that documentation typically requires review.
People who lose their job-based coverage, for example, have to show that they had it and lost it. “The process is deliberately cumbersome, and it’s going to cause people to remain without coverage,” one South Carolina broker told health care writer Andrew Sprung.
Paying hospitals for providing COVID-19 treatment for people who are uninsured will ... give patients peace of mind, but it’s not the same as providing comprehensive health insurance. Larry Levitt, Kaiser Family Foundation
In addition, 14 states, including Florida, Georgia and Texas, have not expanded Medicaid, as the Affordable Care Act’s architects intended. In those states, most of which are in the South, large numbers of the working poor won’t have options for insurance because the eligibility guidelines for Medicaid remain so narrow.
Citing that problem, a coalition of Democrats and advocates have been urging those states to expand Medicaid now. Separately, they have been urging the Trump administration to reopen enrollment at HealthCare.gov, the federal clearinghouse for individual insurance policies, partly on the theory that it would streamline the application process. The insurance lobby has made a similar plea.
Officials in states, including California and Maryland, that run their own exchanges rather than rely on HealthCare.gov, have already decided to open new enrollment periods. The Trump administration has rejected that option.
What’s Coming Next ― Maybe
Congress could address the matter when it returns and crafts yet another piece of legislation to provide relief and promote recovery from what looks like it will be the greatest economic downturn since the Great Depression.
Ideas that have gotten attention and support, not just from former Vice President Biden but also from House Speaker Nancy Pelosi (D-Calif.), include making Affordable Care Act subsidies more generous, forcing Trump to start a new HealthCare.gov open enrollment period, and expanding government COVID-19 coverage to include all out-of-pocket expenses related to tests and treatment, even for people who have coverage.
Although the nation’s major insurers have mostly waived out-of-pocket COVID-19 costs, they don’t make the final coverage decisions about most large employer plans. The employers do. And there are some insurers, including the carriers that offer skimpier “short-term” plans that the Trump administration has promoted, that will not be covering COVID-19 expenses because their benefits have gaps and limits.
Other ideas are circulating. Some experts have suggested having the federal government subsidize COBRA payments, which are the full premiums for employer insurance that former employees can pay (under terms of the Consolidated Omnibus Budget Reconciliation Act) in order to keep their job-based plans.
Jon Walker, an Oregon-based writer and analyst, has suggested opening up TriCare Select, which the Defense Department operates for military families and retirees. Sen. Bernie Sanders (I-Vt.) has proposed having Medicare cover all out-of-pocket expenses for all Americans, regardless of whether they have insurance or not, for the duration of the national emergency.
Sanders, of course, has long wanted to create an enhanced version of Medicare that would cover all bills for everybody. As recently as a few weeks ago, Trump was trashing that as a government takeover of health care. But the president’s new initiative has a few things in common with the Sanders plan, including a stipulation that the new program will pay for COVID-19 expenses at the same rate that Medicare does.
That’s a controversial proposition, or at least it has been traditionally because Medicare generally pays less than commercial insurance. Hospitals say it leaves them losing money, while conservatives say it’s a form of price controls.
But the hospitals are desperate for any money they can get right now because the pandemic has put such a strain on their finances. And although conservatives still don’t like price controls, the sheer numbers of Americans who will need help with their medical bills are forcing them (or at least it is forcing Trump) to act.
It’s a very different political dynamic than the U.S. has seen in a while. Friday’s announcement may not be the last time it leads to progress on health care that defies traditional notions of what is and isn’t possible.
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