Medically reviewed by Susan Kerrigan, MD and Marianne Madsen
To many, the COVID-19 pandemic shone a spotlight on an ongoing issue. Getting treated for a medical condition is often dependent on income and employment. Even in “normal times,” the poor, the unemployed, and the homeless often have trouble accessing health care. Younger middle class people face similar challenges. With the highest number of COVID-19 fatalities–but nowhere near the highest rate per-capita–the U.S. did a decent job protecting white middle-class Americans while people of color (both young and old) suffered outsized deaths and hospitalizations.
By 2021, COVID-19 had become the country’s number one cause of death. For some, the pandemic offers compelling reasons to explore a “public option”––health insurance subsidized by the Federal government for anyone who wants it. Most countries have nationalized health care. In the U.S., adults usually receive insurance through their employer. This has left coverage gaps––gaps which some believe were responsible for the country’s high number of COVID-19 fatalities. Worse, since millions lost their jobs, millions also lost their insurance. The country’s new president, Joe Biden, hopes to reduce the number of uninsured even as he navigates the nation toward a post-pandemic future. So what are some health policy changes and payment reforms in the Biden administration? How will they affect not only the uninsured but anyone who hopes for quality care along with the higher earners asked to subsidize it?
No Job, No Insurance
First a history lesson. While U.S. soldiers were fighting World War II, stateside businesses still needed workers. Fearing that if companies increased wages, it would lead to higher inflation, in 1942 then-U.S. President Franklin D. Roosevelt signed an executive order freezing wages. Besides hiring more women, companies began offering benefits as an incentive. The next year, the Internal Revenue Service decided that employer-offered insurance should be a tax-free benefit. This made it even more attractive. When wage freezes were lifted, the benefits remained. Less than 10% of Americans had health insurance in 1940. A decade later, that number had skyrocketed to 50%.
Fast forward to 2021. The United Kingdom, Israel, and numerous other nations have implemented national health care. They also spend far less of their Gross Domestic Product on health care. For the U.S. in 2019, that figure was 17% with the next highest country––Switzerland––at 12%. For Israel, the figure is just eight percent. That works out to around $11,000 being spent on health care by every person in the U.S.
Until someone reaches age 65 (the minimum age for enrollment in Medicare), public health insurance is available only to those with fairly low incomes. In 2010, then-President Barack Obama hoped to reduce the number of uninsured. His signature Affordable Care Act sought to require every adult to have insurance while offering subsidies to anyone with an income less than 400% of the Federal Poverty Level. The bill was wildly unpopular among Republicans. Obama’s Democrats only managed to narrowly pass the bill using arcane procedural maneuvers in the Senate––where notably reliably left-leaning Massachusetts had elected a Republican Senator who promised to vote against the bill.
Often derisively called Obamacare, the ACA has gained public support. However it has been a consistent target for Republicans. In 2012, Chief Justice John Roberts cast the deciding Supreme Court vote that the individual mandate that adults have insurance or pay a fine was constitutional under Congress’s authority to levy taxes. However, the majority ruled that forcing states to expand Medicaid (publicly provided insurance for low-income Americans) was unconstitutional. Despite a majority in the House and Senate in 2017, Republicans were unable to completely dismantle the law. They were, however, able to end the individual mandate. The unpopular requirement has disproportionately affected people who earn less than $50,000 a year. Restoring the mandate is part of Biden’s healthcare agenda.
Biden’s Plans
Although the number of uninsured Americans reached a low of 20 million in 2016, by 2019 it had reached nearly 30 million. Most uninsured families have at least one full-time worker; most uninsured people cite cost as the largest obstacle to buying insurance. Given the spike in unemployment in 2020, the numbers of uninsured dramatically increased in 2021. Some estimates put it at an additional 15 million newly uninsured (including dependent children of the newly jobless.)
At its core, the Biden agenda hopes to increase the number of insured adults. This could be accomplished in part by lowering the age when older adults can get Medicare from age 65 to 60 (which means some 20 million more people would be eligible.) Following the 2021 Supreme Court decision, 14 states chose not to expand Medicaid. Biden hopes to bring some five million people in these states into the insurance fold. People who don’t have insurance could be automatically enrolled in the program or a similar public-funded insurance. Measures to cap premiums at 8.5% of income may make more people willing to join. However, for those who earn below the national median of 50K, paying $850 per $10,000 of income may still be too high, which is why subsidies and tax benefits are also included. Other proposals could include measures to lower the cost of prescription drugs and changes to tax policy to benefit individuals who buy insurance rather than just corporations.
For the opposition, cost and increased bureaucracy are a huge disincentive. After successfully passing a almost two trillion dollar COVID relief bill, the Biden administration is currently championing an infrastructure bill with a similar price tag. Paying for it requires an increase in the corporate tax rate. Paying for any health care expansion will require another increase in taxes––this time among higher earners. For the opposition, the success of COVID vaccinations in the U.S. versus western Europe offer a firm argument against health care bureaucracy. Yet vaccine hesitancy is stronger in the EU, while nations with national health care like the UK and Israel have been more successful than the U.S. No matter what side of the argument you fall on, the one thing most can agree upon is that the coming battle over healthcare in the U.S. will be epic.
Written by John Bankston
References
- Responding to Healthcare Disparities and Challenges With Access to Care During COVID-19
- COVID-19 is the Number One Cause of Death in the U.S. in Early 2021
- United Kingdom: Health System Review
- Israel: Health System Review
- How does health spending in the U.S. compare to other countries?
- Affordable Care Act (ACA)
- Key Facts about the Uninsured Population
- Coronavirus (COVID-19) deaths worldwide per one million population as of April 21, 2021, by country
- The Real Reason the U.S. Has Employer-Sponsored Health Insurance
- Let’s recall why the Affordable Care Act is so messed up
- KFF Health Tracking Poll: The Public’s Views on the ACA
- Court Backs Obama on Health Law
- A tax penalty could help shore up Obamacare in California. Gavin Newsom wants to try it.
- How Many Americans Have Lost Jobs with Employer Health Coverage During the Pandemic?
- Biden’s Healthcare Agenda In 2021: Shoring Up The Affordable Care Act
- Public option in Biden plan could change the face of US health care
- Covid-19 Vaccine Hesitancy Is Worse In E.U. Than U.S.
