At Last A Little Relief

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Yesterday, Congress passed the CARES Act and Trump signed the bill in a ceremony in the White House. The Secretary of the Department of Labor tweeted news of the events yesterday:

Despite its numerous flaws and wholly inadequate support for workers, we now have some relief for Americans. $1200 for every adult citizen, $500 for each child, for everyone with income under $75k a year. For those living large on greater incomes, the benefit phases out at $99k. It won’t be a permanent solution, but they did increase the maximum weekly unemployment benefit by $600 a week for 4 months. That’s a very hefty increase. That should help a lot of people get by until we can go back to work again.

This week, a record 3 million people applied for unemployment benefits. Of course, that number is preliminary, and it will be revised. Those 3 million people could be the start of a trend towards 20% unemployment, a number suggested by Treasury Secretary Steve Mnuchin if we did nothing. I hope he’s wrong and that we will see far less unemployed than current trends suggest.

I’ve seen reports of people getting huge medical bills after recovering from COVID-19. On Twitter, I saw in one case, a person without insurance got a medical bill for $34k. And that probably comes on top of being laid off and losing a major source of income. The CARES Act isn’t going to help very may of the people with a big healthcare bill from just this one virus.

According to the Association of Health Insurance Providers, most insurers are waiving copays and cost-sharing for testing and screening for coronavirus, but they are really skimpy about treatment. Assuming a typical copay of 15%, that $34k bill means a $5100 out of pocket expense for the insured. So that’s the response of the private healthcare industry? Seems tepid.

WorldMeter says there are now more than 140,000 cases of coronavirus in America. That means more than 140,000 people have been admitted to hospitals for the treatment of COVID-19. Imagine for a moment now, the cost of testing and treating those people. Business Insider says that the average bill for an uninsured for COVID-19 treatment is $73,000 at a hospital. I guess that $34k figure is low, which means that the copay for many, many people could exceed $10k.

Then the cost of treating people for COVID say for 140,000 is roughly $10,220,000,000. Gulp. That’s what you say if you’re an insurance CEO. And that’s just the start. Now we’re talking numbers that approach or beat the market capitalization of some of the biggest health insurance companies. The Motley Fool did a survey last year and found:

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Surely after the recent bloodbath on Wall Street, those numbers have suffered significant declines. Some investors on Yahoo Finance estimated that on March 20th, there were already 2 million people infected with COVID-19. They also estimated 800 deaths by March 26th — they were low — the actual number was 1200. And they further estimated that there are about 46,000 hospital beds in America, not enough to accommodate their forecast of demand at 86,000 beds just for the coronavirus.

Given the numbers and the scale of demand on our resources, it is conceivable that most of the biggest health insurance companies will declare bankruptcy in the not too distant future. They will demand relief from the government for their poor planning. In return for that relief, we should cap total compensation for any one employee or executive at $2 million, ban stock buybacks forever, and require the insurance companies to submit to greater oversight.

At this moment, I’m thinking of the headless horseman and candidate for president, Joe Biden. I can recall how he said that most Americans like their health insurance. Politifact has a direct quote:

“160 million people like their private insurance,” Biden said during the November Democratic presidential primary debate.

Joe’s statement was rated as “half-true” by Politifact. I can tell you that there are some things that I like about my health insurance company. But I don’t really like my health insurance company. They see me as a profit center. They see me as a statistic. They see me as an adversary when I promote Bernie Sanders and Medicare for All on Twitter and on my blogs.

Clearly, Joe Biden is appealing to the moderate voter in his statement. But after the coronavirus, an extreme event by any measure, there is no moderate response that can meet the demands imposed by this one virus. When insurance companies are bankrupt, and many of them will be bankrupt when this pandemic passes, it would be political malpractice to suggest anything less than Medicare for All as proposed by Bernie Sanders.

If the purpose of insurance is to spread the risk so that no single person is wiped out by medical bills, the current system fails in every metric. If the purpose of health insurance is to ensure that everyone gets treatment when they need it, the current system fails astronomically. And if the health insurance companies can’t handle the coming flood, then they need to get out of way and allow the enactment of Medicare For All.

We are at a point now, where we can clearly say that the current “every man for himself” ethic has failed. If we’re in this together, then we must act together.

Write on.

Written by

Husband, father, worker, philosopher, and observer. Plumbing the depths of consciousness to find the spring of happiness. Write on.

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