The Pandemic Will Move Most Of Us To The Left
But it will take some time for those on the right to come to terms with reality.
Those on the right of the political spectrum are learning a bitter lesson, one that will be hammered into public discourse until they finally acknowledge it: the private sector isn’t big enough, smart enough, or aware enough to step in when the government fails. And this time, with this pandemic, American governments failed big time. Did the private sector take up the slack? Judging by the millions now unemployed, probably not.
A study in contrast has already been drawn between the United States and a few other “socialist” countries. South Korea is a shining example of what to do right in response to signs of a pandemic. They acted forcefully, aggressively, and early, to coordinate efforts of government, researchers, and business, to isolate the cause of COVID-19, develop tests for it and to isolate those found to be infected. They did not have to shut down their economy in response to the virus. They will have an economic downturn, but they’re not going to have an economic depression as we will.
The dream of the ardent conservative, the one where business steps in when the government fails, is dead. Much of the damage done to the federal government, the empty offices, the brain drain, and the regulatory rollbacks, are part of that dream. We can thank people like Steve Bannon and Donald Trump for a lack of vision to see that sometimes, you’re dealing with something so big, so vast that business is simply not capable or even willing to provide an adequate response to it. The coronavirus is that.
The pandemic has made the need for Medicare for All that much more urgent. In the last few weeks, more than 10 million people have filed for unemployment benefits. That’s 10 million more people without health insurance. And most of them will not be able to afford gigantic COBRA payments to keep their health insurance coverage. Most of the newly unemployed will be more concerned with buying food and keeping the lights on than with keeping their health insurance.
Conservatives believe that people should be motivated to work. Is the potential to be left without health insurance the kind of motivation they were thinking of? Or can we finally cut the ties between health insurance and employment?
The sentiment that I see now is that Joe Biden has sewn up the nomination. Well, the primaries aren’t over yet, but if you’re going to insist that Joe Biden is the nominee, keep in mind that Joe Biden doesn’t think we need Medicare for All. In fact, he’s arrogantly expressed his opposition to it.
Biden is probably still living in that dream world where we can work with Republicans to make Obamacare better. By all appearances, he thinks that an incremental approach is a great negotiating tactic. With a few court cases engineered by Republicans to keep Obamacare in their cross-hairs, it is folly to think that Republicans will be open to compromise. They are intent on erasing any memory of Obama, and Obamacare.
Just yesterday Politico reported that Trump has refused to open enrollment for Obamacare in response to the pandemic. Trump has opted instead to create an ad-hoc system of paying hospitals for their expenses directly on condition that customers receive no bills for treatment. Trump’s current proposals kind of look like “Medicare For All Coronavirus Victims”, and they are far to the left of Biden.
In recent days Biden has called upon Trump to open enrollment for Obamacare, still bidding for an incremental approach to health care reform. It is apparent then, that Trump and his allies are not motivated to open Obamacare and I suspect, they are hopeful they will get a court ruling they like before November. If anything, they will have stolen the lead in getting us to Medicare For All, however reluctant they may be.
The ongoing pandemic changes everything. Tens of thousands have died already. More than 300,000 cases have been reported to this day (32k yesterday alone), and the charts still show a steep upward trend for more cases. Current trends are steady, with no reprieve in sight just yet. If you’re looking for the apex, you will have to be patient.
Even the largest private health insurance companies have shown that they were not prepared for this. For the past few years, they have been buying back stock to pump CEO and management compensation just like many other companies on the Fortune 500. CEO’s have for four decades shown their mindset of primacy over the customer, and they’re going to pay a heavy price. Money spent on share buybacks could have been spent on employee compensation, including health insurance. But putting money into the pockets of the people only came into vogue a couple of weeks ago, long after the pandemic appeared. And even then, that trend started with government money.
The three stimulus plans passed so far reflect a sharp tack leftward by both parties. And now there have been calls for mortgage and rent moratoriums in the wake of steep economic declines. There have been strong hints for basic income in the political discourse leading up to the third stimulus bill. Business will get the larger share of that stimulus money, so putting money into the pockets of the worker still seems almost an afterthought. Republicans have resisted the idea of giving money directly to the people until they got their pound of flesh, money for employers to skim for their second home on the coast of Spain. I guess they’re still dreaming that Supply Side Economics actually works. Recent legislation suggests otherwise.
At this point, I think that Medicare For All is inevitable. The pandemic has shown us that the private health insurance system we have is inadequate to meet demand. But even if Bernie Sanders were elected president, the infrastructure is not there. The political will is not likely to be found, at least not in the United States Senate, anyway. Red States have a pretty strong lock on the majority in the Senate, and that’s not likely to change anytime soon.
Even under the best of circumstances (Sanders as president, blue wave in both houses), it would take a few years to get it started. Dean Baker is a senior economist with the Center for Economic Policy and Research. He wrote, “Getting to Medicare for All, Eventually”, and in it, he lays out a reasonable and incremental plan for getting us to universal health care. After reading that article, I found a few takeaways that I thought I’d share with you.
First, there are logistical constraints that must be addressed. To test those constraints, Baker suggests that we lower the Medicare age to 64. This will have the effect of doubling the number of enrollees. With double the enrollees, the government will get a good start on building the infrastructure required for Medicare For All.
Baker also suggests that we need to work on reducing the input costs of health care. We pay roughly twice as much as other developed countries for our health care. There is no reason for this other than personal profit at the expense of the hourly worker. Baker highlights the patent system as a major focus of waste in the health care system:
The patent monopoly system is an incredibly inefficient mechanism for supporting innovation, especially in the health care sector. None of the normal logic of the benefits of consumer choice applies here. There almost always is a third-party payer for drugs or medical equipment (either the government or an insurer) so the idea that we are somehow measuring consumers’ willingness to pay is basically nuts. What drug companies can get away with charging is overwhelming a political decision.
And Baker recommends that we change the way we pay for drug and medical device research so that drug research is paid for upfront, is open, and drugs are put into the public domain reducing their costs to that of generics, and ensuring that everyone can access study data to verify the results. These changes will allow a doctor much greater latitude in terms of choosing the best drug or device for the patient, rather than putting the patient at risk of personal bankruptcy or negative health outcome.
Another change recommended by Baker is to fix traditional Medicare by instituting out of pocket spending caps:
The most immediate fix to the traditional Medicare program would be to have an out-of-pocket cap on spending. This is actually required for Medicare Advantage plans, but for some reason, no cap was ever put in place for traditional Medicare. We can start with a cap of $6,000, which is roughly the cap for Medicare Advantage. As we move towards the more comprehensive system envisioned by proponents of Medicare for All, this cap can be lowered, but the first step is simply to have a cap in place comparable to the cap for Medicare Advantage plans.
The spending cap puts the government on the hook for Medicare costs, but it also prevents people from going into permanent medical debt for them and their descendants. With a prudent reserve, something that many boomers have saved in their 401ks, a $6000 spending cap (with the rest paid for by the government) is a lift that many people can manage.
I have something like this in my current health insurance plan. I have a high deductible insurance plan and a health savings account. I pay for out of pocket expenses through my health savings plan. Even with this insurance, I have seen 10–15% out of pocket costs for most bills. At the beginning of each year, my employer contributes $1500 to that plan and then for the rest of the year, we contribute a certain amount each pay period. With planning and prudence, I will save $7000 in my HSA in a couple of years. $7000 is the annual spending cap for anything that could happen in one year.
The odds of me incurring $7000 or more of out of pocket medical expenses for one year are low, but I’d be covered. The odds of that happening for several years in a row are somewhat remote. I’d prefer to have Medicare for All as proposed by Bernie Sanders, but at least for now, I have some hope that I will never be wiped out by medical debt. I have enough money in my 401k that I could manage a few years of bad luck if I needed to. The problem with the insurance plan that I have is that it’s not a very popular or well-known solution, and not everyone can do this. Especially when we consider that many Americans can’t manage a $400 emergency spend without going into debt.
This is why I think Medicare for All is inevitable. This is just the first pandemic to open our eyes and see what has been done to us, the average citizens. The pandemic shows us how inadequate our health care system really is. And it also shows us how much the leaders of our country, in business and in government, really think of us. Which is to say, not much at all. The pandemic has shown us the fraud and the failure of supply-side economics in a way that no amount of theoretical debate could do.
It is my hope that someday, our leaders will figure out that if you have no health, you have no wealth.