The Potter Report
COVID Bill is a Windfall for Health Insurance Companiesby Wendell POTTER - The Potter Report - March 10, 2021
As a former health insurance exec who quit the business, let me tell you: No one will be more excited about the new COVID-19 package than my old friends in the corporate insurance industry.
It would funnel $48 billion of taxpayer money to them, after their most profitable year to date.
The COVID-19 bill would temporarily pay for Affordable Care Act marketplace plans and COBRA subsidies for people who lost their jobs and insurance. That would check off a major item on insurers’ wish list because it guarantees payment to our wasteful system that’s burdened by 30 percent administrative costs.
A more economical approach?
Open our existing Medicare program (with a 2 percent administrative cost) for the Americans hardest-hit by COVID-19. This would allow folks to access the care many desperately need without Uncle Sam (you) footing a bloated bill.
For years, insurers and pundits have called for Americans to “put more skin in the game” when it comes to health care spending. With health care costs already at $3.8 trillion each year and now a fresh $48 billion windfall courtesy of taxpayers, there isn’t more skin for folks to give.
Pandemic Relief Bill Fulfills Biden’s Promise to Expand Obamacare, for Two Years
With its expanded subsidies for health plans under the Affordable Care Act, the coronavirus relief bill makes insurance more affordable, and puts health care on the ballot in 2022.
by Sheryl Gay Stolberg - NYT - March 8, 2022
WASHINGTON — President Biden’s $1.9 trillion coronavirus relief bill will fulfill one of his central campaign promises, to fill the holes in the Affordable Care Act and make health insurance affordable for more than a million middle-class Americans who could not afford insurance under the original law.
The bill, which will most likely go to the House for a final vote on Wednesday, includes a significant, albeit temporary, expansion of subsidies for health insurance purchased under the act. Under the changes, the signature domestic achievement of the Obama administration will reach middle-income families who have been discouraged from buying health plans on the federal marketplace because they come with high premiums and little or no help from the government.
The changes will last only for two years. But for some, they will be considerable: The Congressional Budget Office estimated that a 64-year-old earning $58,000 would see monthly payments decline from $1,075 under current law to $412 because the federal government would take up much of the cost. The rescue plan also includes rich new incentives to entice the few holdout states — including Texas, Georgia and Florida — to finally expand Medicaid to those with too much money to qualify for the federal health program for the poor, but too little to afford private coverage.
“For people that are eligible but not buying insurance it’s a financial issue, and so upping the subsidies is going to make the price point come down,” said Ezekiel Emanuel, a health policy expert and professor at the University of Pennsylvania who advised Mr. Biden during his transition. The bill, he said, would “make a big dent in the number of the uninsured.”
But because those provisions last only two years, the relief bill almost guarantees that health care will be front and center in the 2022 midterm elections, when Republicans will attack the measure as a wasteful expansion of a health law they have long hated. Meantime, some liberal Democrats may complain that the changes only prove that a patchwork approach to health care coverage will never work.
“Obviously it’s an improvement, but I think that it is inadequate given the health care crisis that we’re in,” said Representative Ro Khanna, a progressive Democrat from California who favors the single-payer, government-run system called Medicare for All that has been embraced by Senator Bernie Sanders, independent of Vermont, and the Democratic left.
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“We’re in a national health care crisis,” Mr. Khanna said. “Fifteen million people just lost private health insurance. This would be the time for the government to say, at the very least, for those 15 million that we ought to put them on Medicare.”
Mr. Biden made clear when he was running for the White House that he did not favor Medicare for All, but instead wanted to strengthen and expand the Affordable Care Act. The bill that is expected to reach his desk in time for a prime-time Oval Office address on Thursday night would do that. The changes to the health law would cover 1.3 million more Americans and cost about $34 billion, according to the Congressional Budget Office.
Representative Frank Pallone Jr. of New Jersey, who helped draft the health law more than a decade ago and leads the House Energy and Commerce Committee, has called it “the biggest expansion that we’ve had since the A.C.A. was passed.”
But as a candidate, Mr. Biden promised more, a “public option” — a government-run plan that Americans could choose on the health law’s online marketplaces, which now include only private insurance.
“Biden promised voters a public option, and it is a promise he has to keep,” said Waleed Shahid, a spokesman for Justice Democrats, the liberal group that helped elect Representative Alexandria Ocasio-Cortez and other progressive Democrats. Of the stimulus bill, he said, “I don’t think anyone thinks this is Biden’s health care plan.”
Just when Mr. Biden or Democrats would put forth such a plan remains unclear, and passage in an evenly divided Senate would be an uphill struggle. White House officials have said Mr. Biden wants to get past the coronavirus relief bill before laying out a more comprehensive domestic policy agenda.
The Affordable Care Act is near and dear to Mr. Biden, who memorably used an expletive to describe it as a big deal when he was vice president and President Barack Obama signed it into law in 2010. It has expanded coverage to more than 20 million Americans, cutting the uninsured rate to 10.9 percent in 2019 from 17.8 percent in 2010.
Even so, some 30 million Americans were uninsured between January and June 2020, according to the latest figures available from the National Health Interview Survey. The problem has only grown worse during the coronavirus pandemic, when thousands if not millions of Americans lost insurance because they lost their jobs.
Mr. Biden has already taken some steps to address that. In January, he ordered the Affordable Care Act’s health insurance marketplaces reopened to give people throttled by the pandemic economy a new chance to obtain coverage. He also took steps to restore coverage mandates that had been undermined by his predecessor, including protecting those with pre-existing medical conditions.
The stimulus bill would make upper-middle-income Americans newly eligible for financial help to buy plans on the federal marketplaces, and the premiums for those plans would cost no more than 8.5 percent of an individual’s modified adjusted gross income. It would also increase subsidies for lower-income enrollees.
The White House and Democratic backers of the bill say its health care provisions represent the most significant expansion of the Affordable Care Act since it was passed, and perhaps the only expansion politically possible. With an evenly divided Senate, they note, there is very little chance of passage for a more fundamental restructuring, like Medicare for All.
“I understand the desire to really overhaul the system and make it simpler, but I think there is also the political reality of what can be pushed through,” Dr. Emanuel said.
Health care remains a powerful political selling point for Democrats with voters, who consistently give Democrats an edge when asked which party they trust most to handle the issue. Republicans have spent the last decade trying to undermine the Affordable Care Act in the courts and trying to repeal it in Congress — without success.
“I think that argument has been fought and lost,” said Whit Ayres, a Republican pollster, conceding that the repeal efforts are over, at least for now, with Democrats in charge of the White House and both houses of Congress.
Republicans have always said that their plan was to repeal and replace the health law, but after 10 years they have yet to come up with a replacement. Mr. Ayres said his firm is working on “coming up with some alternative health care message” that does not involve “simply throwing everybody into a government-run health care problem.”
Yet polls show that the idea of a government-run program is gaining traction with voters. In September, the Pew Research Center reported that over the previous year, there had been an increase, especially among Democrats, in the share of Americans who say health insurance should be provided by a single national program run by the government.
The poll found that 36 percent of Americans, and 54 percent of Democrats, favored a single national program. When asked if the government had a responsibility to provide health insurance, either through a single national program or a mix of public and private programs, 63 percent of Americans and 88 percent of Democrats said yes.
The debate over Medicare for All was a stark dividing line between progressives and more mainstream Democrats during the 2020 elections. Mr. Sanders and Senator Elizabeth Warren of Massachusetts staked their candidacies on it, only to lose the nomination to Mr. Biden.
But in contested House primaries, support for Medicare for All helped give a boost to candidates like Jamaal Bowman of New York, Marie Newman of Illinois and Cori Bush of Missouri. All ousted Democratic incumbents last year in primary races that featured health care as a central issue.
“I would argue there is more momentum for Medicare expansion given the pandemic and the experience people are having,” said Mr. Khanna, the California congressman. “They bought time, but I think at some point there will be a debate on a permanent fix.”
https://www.nytimes.com/2021/03/08/us/politics/obamacare-biden.html?
Editors Note -
The following link is to an interview with Jonathan Cohn, author of the new book "The Ten Year War". You'll learn a great deal about the Affordable Care Act and the long slog to its passage, and why such a flawed piece of legislation was probably the best that could be done at the time it was passed and made it into law. from both the interview and the book. More important, you'll learn a lot about the continuing barriers to creating a more perfect law and how to overcome them.
-SPC
Editor's Note -
The following article is one glaring example of what happes when you combine capitalism run amok in our for-profit healthcare system with legally sanctioned government corruption, such as our campaign finance system.
Res-Ipsa-Loquitur.
- SPC
How One Firm Put an ‘Extraordinary Burden’ on the U.S.’s Troubled Stockpile
The shortage of lifesaving medical equipment last year was a searing example of the government’s failed coronavirus response. As health workers resorted to wearing trash bags, one Maryland company profited by selling anthrax vaccines to the country’s emergency reserve.
Chris Hamby and
WASHINGTON — A year ago, President Donald J. Trump declared a national emergency, promising a wartime footing to combat the coronavirus. But as Covid-19 spread unchecked, sending thousands of dying people to the hospital, desperate pleas for protective masks and other medical supplies went unanswered.
Health workers resorted to wearing trash bags. Fearful hospital officials turned away sick patients. Governors complained about being left in the lurch. Today the shortage of basic supplies, alongside inadequate testing and the slow vaccine rollout, stands as a symbol of the broken federal response to a worldwide calamity that has killed more than a half-million Americans.
Explanations about what went wrong have devolved into partisan finger pointing, with Mr. Trump blaming the Obama administration for leaving the cupboard bare, and Democrats in Congress accusing Mr. Trump of negligence.
An investigation by The New York Times found a hidden explanation: Government purchases for the Strategic National Stockpile, the country’s emergency medical reserve where such equipment is kept, have largely been driven by the demands and financial interests of a handful of biotech firms that have specialized in products that address terrorist threats rather than infectious disease.
Chief among them is Emergent BioSolutions, a Maryland-based company now manufacturing Covid-19 vaccines for AstraZeneca and Johnson & Johnson. Last year, as the pandemic raced across the country, the government paid Emergent $626 million for products that included vaccines to fight an entirely different threat: a terrorist attack using anthrax.
Throughout most of the last decade, the government has spent nearly half of the stockpile’s half-billion-dollar annual budget on the company’s anthrax vaccines, The Times found. That left the government with less money to buy supplies needed in a pandemic, despite repeatedly being advised to do so.
Under normal circumstances, Emergent’s relationship with the federal stockpile would be of little public interest — an obscure contractor in an obscure corner of the federal bureaucracy applying the standard tools of Washington, like well-connected lobbyists and campaign contributions, to create a business heavily dependent on taxpayer dollars.
Security concerns, moreover, keep most information about stockpile purchases under wraps. Details about the contracts and inventory are rarely made public, and even the storage locations are secret.
But with the stockpile now infamous for what it doesn’t have, The Times penetrated this clandestine world by examining more than 40,000 pages of documents, some previously undisclosed, and interviewing more than 60 people with inside knowledge of the stockpile.
Former Emergent employees, government contractors, members of Congress, biodefense experts and current and former officials from agencies that oversee the stockpile described a deeply dysfunctional system that contributed to the shocking shortages last year. Their accounts were confirmed by federal budget and contracting records, agency planning documents, court filings, corporate disclosures and transcripts of congressional hearings and investor presentations.
Purchases are supposed to be based on careful assessments by government officials of how best to save lives, but many have also been influenced by Emergent’s bottom line, the documents and interviews reveal. One year, the government increased its order of Emergent’s main anthrax vaccine by $100 million after the company insisted it needed the additional sales to stay in business, according to two former federal officials. At the time that order was announced, in 2016, the reserve already had enough to vaccinate more than 10 million people. The stockpile has long been the company’s biggest and most reliable customer for its anthrax vaccines, which expire and need to be replaced every few years.
In the two decades since the repository was created, Emergent’s aggressive tactics, broad political connections and penchant for undercutting competitors have given it remarkable sway over the government’s purchasing decisions related to the vaccines, the interviews and documents show.
One of the vaccines has yet to be approved as safe and needed special clearance to be bought by the government, which has maintained a large supply of another Emergent vaccine after a string of anthrax attacks nearly 20 years ago left five people dead. Those were the last anthrax attacks in the United States. While national security officials still consider anthrax a threat, it has not received specific mention since 2012 in the intelligence community’s annual public assessment of dangers facing the country, a report that has repeatedly warned of pandemics.
“The risk of a serious terrorist attack with anthrax is real, but that doesn’t mean you buy unlimited quantities of vaccine,” said Dr. Thomas Frieden, the director of the Centers for Disease Control and Prevention under former President Barack Obama. “It is a zero sum. There’s only so much money, and so if you buy more of one thing, you have to buy less of another.”
Emergent bought the license for the country’s only approved anthrax vaccine in 1998 from the State of Michigan. Over time, the price per dose the government agreed to pay Emergent increased nearly sixfold, accounting for inflation, contributing to record revenues last year that topped $1.5 billion. The biggest source was the sale of anthrax and smallpox vaccines even as the company also began manufacturing coronavirus vaccines.
The company’s chief executive, Robert Kramer, told Wall Street analysts last month that 2020 was “the strongest year in our 22-year history.” Emergent’s stock performed so well that its founder and chairman cashed in shares and options worth over $42 million, more than he had redeemed in the previous five years combined, corporate filings show.
The company declined to make Mr. Kramer or other executives available for an interview before publication, citing the pressing needs of its Covid-19 vaccine efforts. In written responses to questions, an Emergent spokeswoman defended the vaccine’s pricing, saying “the vaccine and the facilities needed large, long-overdue investments” when they were purchased from Michigan.
“You can’t protect people from anthrax for less than the cost of a latte,” said the spokeswoman, Nina DeLorenzo, a senior vice president.
The company, whose board is stocked with former federal officials, has deployed a lobbying budget more typical of some big pharmaceutical companies, The Times found, and has sometimes resorted to tactics considered underhanded even in Washington. Competing efforts to develop a better and cheaper anthrax vaccine, for example, collapsed after Emergent outmaneuvered its rivals, the documents and interviews show.
As Emergent prospered, other companies working on pandemic remedies for the stockpile were squeezed out of government spending decisions, and former federal health officials said preparations for an outbreak like Covid-19 almost always took a back seat to Emergent’s anthrax vaccines.
In one telling example, The Times found, the government approved a plan in 2015 to buy tens of millions of N95 respirators — lifesaving equipment for medical workers that has been in short supply because of Covid-19 — but the masks repeatedly lost out in the competition for funding over the years leading up to the pandemic, according to five former federal health officials involved in the effort. During the same period, Emergent sold the government nearly $1 billion in anthrax vaccines, financial disclosures show.
Ms. DeLorenzo said Emergent has long insisted that there should be more federal spending to ensure “preparedness for the full range of threats.” It would be wrong to choose one threat over the other, she said, and to “partially fund everything at a low level” would leave “the American public dangerously exposed to real and grave threats.”
She characterized the company’s lobbying as “education-focused” and “appropriate and necessary.”
After Dr. Frieden and others in the Obama administration tried but failed to lessen Emergent’s dominance over stockpile purchases, the company’s fortunes rose under Mr. Trump, who appointed a former Emergent consultant with a background in bioterrorism to run the office that now oversees the stockpile.
Yet that official, Dr. Robert Kadlec, also said that spending on the company’s anthrax vaccines limited his ability to prepare for other potential disasters.
“If I could spend less on anthrax replenishment, I could buy more N95s,” Dr. Kadlec said in an interview shortly after leaving office. “I could buy more ventilators. I could buy more of other things that quite frankly I didn’t have the money to buy.”
But even as he fretted over the stockpile’s lack of preparedness for a pandemic, Dr. Kadlec said, he felt compelled to continue preparing for anthrax and other bioterrorism threats. His office awarded roughly $3 billion in long-term contracts to Emergent in the months before the Covid-19 crisis, and last year decided to buy the company’s unlicensed anthrax vaccine — relying on the same emergency authority that has allowed the use of unlicensed coronavirus vaccines and treatments.
And now, as some members of Congress push for larger reserves of ventilators, masks and other equipment needed in a pandemic, a trade group led in part by a top Emergent lobbyist has warned that the purchases could endanger companies focused on threats like anthrax and smallpox by drawing down limited funds.
Ms. DeLorenzo said the commercial market was too small to sustain manufacturing on its own, so companies needed government assurances.
“The capabilities must be maintained, or they are in danger of being lost, leaving the country vulnerable to threats,” she said. “When almost no one else would invest in preparing to protect the American public from grave threats, Emergent did, and the country is better prepared today because of it.”
Lamar Alexander, who retired in January as a Republican senator from Tennessee and was an influential member of two committees overseeing the stockpile, said the pandemic had opened Congress’s eyes.
“Today, I think, we would not allow anthrax to take up half the budget for a guaranteed supply of vaccines,” he said, adding, “Surely after such a calamity as the last year, we should take a fresh look at stockpiles and manufacturing and preparing for the next pandemic.”‘A Very, Very Good Business’
The fates of Emergent and the Strategic National Stockpile have been intertwined almost from the start. Both trace their origins to the final years of the Clinton administration, and both were transformed in 2001 by the Sept. 11 attacks and the subsequent anthrax attacks, when letters containing the deadly bacteria were sent to members of Congress and the media.
The two have been locked ever since in what an Emergent executive once told investors was “a very symbiotic dance.”
Emergent’s rise is the stuff of lore in biodefense circles — a tale of savvy dealings, fortuitous timing and tough, competitive tactics.
“They’re very vicious in their behavior toward anybody they perceive as having a different point of view,” said Dr. Tara O’Toole, a former Homeland Security official who says she ran afoul of Emergent in 2010 after telling Congress that the nation needed a newer and better anthrax vaccine.
Ms. DeLorenzo, the Emergent spokeswoman, said the company “uses traditional advocacy channels” in Washington.
Congress first approved funds for a national reserve in 1998. President Bill Clinton, attuned to the rising threat of terrorism after the 1993 World Trade Center bombing, began pressing for the stockpile after reading a novel about a genetically engineered virus, according to Dr. Margaret Hamburg, a top Clinton and Obama health official. The government was already stocking medical supplies for the military, but the new repository would help states and cities during a health crisis.
That year, the company that would become Emergent — then known as BioPort — paid Michigan $25 million to buy the license for a government-developed anthrax vaccine and an aging manufacturing plant.
The company opened its doors with one product, called BioThrax, and one customer, the Defense Department, which required the vaccine for service members.
The 2001 attacks created a huge new market as the government began filling the stockpile with treatments for anthrax and smallpox.
But Emergent’s anthrax vaccine was not the government’s first choice. It was more than 30 years old and plagued by manufacturing challenges and complaints about side effects. Officials instead backed a company named VaxGen, which was developing a vaccine using newer technology licensed from the military.
Emergent’s successful campaign against VaxGen — deploying a battalion of lobbyists, publicly attacking its rival and warning that it might cease production of its own vaccine if the government didn’t buy it — established its formidable reputation. By 2006, VaxGen had lost its contract and the government had turned to Emergent to supply BioThrax.
“They were totally feared by everybody,” Dr. Philip Russell, a top health official in the administration of President George W. Bush, said in an interview. He said that he clashed with Emergent when he backed VaxGen, and that his reputation came under attack, which was documented by The Times in 2006. (Dr. Russell died this January.)
Ms. DeLorenzo of Emergent said that while other companies had tried over the years to create a next-generation anthrax vaccine, “none have been successful.”
In 2009, a deadly influenza outbreak forced the government to re-evaluate the reserve. The spread of a novel strain of H1N1, in many ways a trial pandemic, sounded an alarm about the government’s poor readiness for naturally arising threats.
That virus claimed an estimated 12,000 lives in the United States. It was a small fraction of the Covid-19 death toll, yet even then the stockpile ran short of protective gear.
“People are saying that we dodged a bullet, and it isn’t that we dodged a bullet,” Dr. Richard Hatchett, a public health adviser to Mr. Obama, recalled telling him during a meeting in the Oval Office. “It’s that nature shot us with a BB gun.”
In response, the group of federal officials who make decisions about the stockpile and other emergency preparations — known as the Phemce, for the Public Health Emergency Medical Countermeasures Enterprise — ordered up a study. It found in 2010 that the government could not afford to devote so much of its budget to a single threat.
Instead, the review concluded, the government should invest more in products with multiple applications, like diagnostic tests, ventilators, reusable respirator masks and “plug and play” platforms that can rapidly develop vaccines for a range of outbreaks.
The review didn’t single out BioThrax for criticism. But a Times analysis of federal documents and corporate disclosures found that from 2010 through 2018, the anthrax vaccine consumed more than 40 percent of the stockpile’s budget, which averaged $560 million during those years.
It was “an extraordinary burden,” Dr. Hatchett said in an interview.
Emergent and the government have withheld details of the stockpile contracts, including how much the company has charged for each dose of BioThrax, but executives have shared some of the missing information with investors.
The company in 1998 agreed to charge the government an average of about $3.35 per dose, documents show. By 2010, the price had risen to about $28, according to financial disclosures and statements by Emergent executives, and now it is about $30. Over the past 15 years, the company recorded a gross profit margin of about 75 percent for the vaccine, in an arrangement that one Emergent vice president called a “monopoly.”
“It is a very, very good business,” the vice president for investor relations, Robert G. Burrows, said in a 2010 presentation.
Dr. Ali S. Khan, who ran the C.D.C. office managing the stockpile until 2014, said bluntly: “We overpaid.”
‘Your Taxpayer Dollars at Work’
One afternoon in October 2010, Wall Street investors gathered at the Millennium Broadway Hotel in Manhattan for a presentation by Mr. Burrows. He shared with them a secret number: 75 million.
That was how many BioThrax doses the government had committed to stockpiling, and it was the backbone of Emergent’s thriving business. In pursuit of that goal, the government had already spent more than $900 million, and it continued to buy virtually every dose Emergent could produce. It had even awarded the company more than $100 million to expand its Michigan factory.
“That’s your taxpayer dollars at work,” Mr. Burrows told the gathering, according to a transcript of the event.
But just three years later, Emergent’s business was under threat.
Unlike smallpox or the coronavirus, anthrax doesn’t spread from person to person, instead infecting people when its spores are released in the environment. The main defense against it is the kind of cheap, commonly used antibiotics that were dispensed after the 2001 letter attacks, also kept in the stockpile.
Emergent’s vaccine, given in three doses, would be useful for emergency workers and others who might risk extended exposure to the spores. But for the general public, it would be an added precaution, multiple health officials said. “The best approach toward anthrax is antimicrobial therapy,” Dr. Anthony S. Fauci, the government’s top infectious-disease expert, told Congress as early as 2007.
So government officials started asking: Did the stockpile need so much of the vaccine?
The government already had part of the answer. Health officials had hired the disaster-preparedness firm I.E.M. to calculate how much benefit the vaccine provided. In an analysis published in 2007, the firm determined that giving antibiotics immediately after a large outdoor anthrax attack was likely to reduce serious illnesses by more than 80 percent. Administering the vaccine would then cut serious illnesses only by an additional 4 percent.
Dr. Sid Baccam, who led the I.E.M. team, said the analysis was regularly updated through 2016 with similar results.
“I think it’s pretty clear that the benefit of the vaccine is marginal,” he said in an interview.
The Emergent spokeswoman said the I.E.M. study did not reflect the totality of research, and suggested the government considered “many different factors” when choosing what to purchase.
The Times found that the origin of the 75-million-dose goal was not scientific analysis or intelligence gathering.
“A bunch of people, including myself, were sitting in a room and asking what kind of attack might happen,” said Dr. Kenneth Bernard, a top biodefense adviser to Mr. Bush, recalling a meeting in the months after the 2001 attacks.
“And somebody said, ‘Well, I can’t imagine anyone attacking more than three cities at once,’” he said. “So we took the population of a major U.S. city and multiplied by three.”
The three cities combined, they figured, would have about 25 million people, each needing the three-dose regimen. The 75 million goal, according to Dr. Bernard and another official involved in the decision, was meant as a rough starting point that would be reassessed.
A team of Homeland Security and health officials began doing just that in 2013. The group determined, in a previously undisclosed analysis, that the government could stockpile less BioThrax and still be prepared for a range of plausible attacks, according to two people involved in the assessment. Separately, government researchers concluded that two doses of BioThrax provided virtually the same protection as three.
The last time anthrax appeared in the intelligence community’s annual Worldwide Threat Assessment, in 2012, the risk of a mass attack by a biological weapon was deemed “unlikely.” And Gregory F. Treverton, who directed the National Intelligence Council, which helped draft the assessments during Mr. Obama’s second term, said in an interview that the idea of a three-city attack affecting 25 million people was “straining credulity.”
Managers of the stockpile recommended in 2015 that with tight budgets, the government should scale back vaccine purchases and direct the savings toward other needs.
But Emergent was ready for them.
Image
‘The We’re-Going-to-Go-Bankrupt Card’
Memories of the powder-filled letters that temporarily shut down the Capitol in 2001 have haunted members of Congress ever since.
“If you talk to the head of the House Intelligence Committee,” Don Elsey, Emergent’s chief financial officer, told investors in 2011, “and you say, ‘What are you most worried about?’ he’ll say, ‘Let me see: Number one, anthrax; number two, anthrax; number three, anthrax.’”
Emergent’s sales strategy was to address that fear by promising the federal government peace of mind with its vaccine.
“There’s a political element involved,” Mr. Burrows, the company’s vice president of investor relations, said at an industry conference in 2016. “I don’t have a marketing expense. I have lobbying expense.”
Since 2010, the company has spent an average of $3 million a year on lobbying — far outspending similarly sized biotech firms, and roughly matching the outlays of two pharmaceutical companies with annual revenues at least 17 times greater, AstraZeneca and Bristol Myers Squibb, Senate lobbying disclosures show.
In 2015, as stockpile managers questioned the large purchases of BioThrax, the spending topped $4 million, and the company added the services of a half-dozen lobbyists from a firm led by a former chief of staff to Mr. Alexander, the Republican former senator who led the health committee. (Mr. Alexander had received a $1,000 campaign contribution from Emergent’s political action committee in 2007 and $2,500 in 2013.)
The move followed a yearslong pattern of retaining a bipartisan lobbying corps of former agency officials, staff members and congressmen, including Pete Hoekstra of Michigan, Tom Latham of Iowa and Jim Saxton of New Jersey.
“Their revolving door is moving at 60 miles per hour,” said former Senator Claire McCaskill, a Democrat from Missouri who had questioned spending on the vaccine while in the Senate. “There is really a lot of incestuousness because it’s such a specialized field.”
Ms. DeLorenzo, the Emergent spokeswoman, said the lobbying was necessary because government investment “in biodefense and other public health threats has not been as strongly prioritized as it should be.”
Over the past 10 years, Emergent’s political action committee has spread almost $1.4 million in campaign contributions among members of both parties. And the Alliance for Biosecurity, a trade group led in part by Emergent’s chief in-house lobbyist, Chris Frech, has honored Democrats and Republicans who hold key committee assignments.
Mr. Frech, who worked for Mr. Bush, has “built up a lot of relationships where he had respect on both sides of the aisle,” said Representative Tom Cole, an Oklahoma Republican and a former chairman of a subcommittee that oversees stockpile spending.
Because Emergent was the sole manufacturer of a product deemed critical to national security, the company has played what one former executive described to The Times as “the we’re-going-to-go-bankrupt card.” Mr. Cole, who received $16,000 from the company’s political action committee in recent years, was familiar with the pitch.
“You have people coming and saying, ‘There’s no market for this — nobody’s going to produce this unless you buy enough of it to keep the production line open,’” he said. “It’s an absolutely appropriate argument to make.”
The agencies that oversaw the stockpile also felt the force of the argument.
“It was very difficult to withstand the argument that you’re not protecting the country against anthrax,” said Dr. Frieden, the former head of the C.D.C., which managed the stockpile until 2018.
Dr. Nicole Lurie, who led the Phemce in the Obama administration, said trying to reduce anthrax vaccine purchases was particularly perilous for Democrats. “Here’s a Republican Congress accusing the administration of being soft on terrorism,” she said.
Emergent’s campaign proved effective. Despite the 2015 recommendation by the stockpile managers, Senate overseers made clear they opposed the reduction, and the government went ahead and bought $300 million worth of BioThrax.
The Committee encourages CDC to consider maintaining its planned procurement of anthrax vaccines when adjusting to changes in commercial pricing or PHEMCE requirements.
A Senate panel advised the C.D.C. not to reduce purchases of anthrax vaccines.
2015 Senate Appropriations Committee Report
But that triumph was just a dress rehearsal for what came next.
In June 2016, with Emergent’s BioThrax contract up for renewal, the C.D.C. announced that the next deal would be far smaller: about six million doses a year rather than the previous nine million.
The company’s stock price dipped and shareholders sued Emergent, claiming they had been misled. Emergent lobbyists had already swung into action weeks earlier, reaching out to Senator Roy Blunt, the Missouri Republican who led the subcommittee that controls the stockpile’s budget. Mr. Blunt asked one lobbyist for talking points that he could bring when he visited the C.D.C. in Atlanta, according to an email contained in court records from the shareholders’ lawsuit.
I was talking to Senator Blunt and I raised with him a concern that my client, Emergent Biosolutions, is having with the lack of clarity and transparency in CDC's contracting process. Senator Blunt told me that he was visiting CDC in Atlanta on that Friday and asked for me to prepare a one pager that explained the issue.
Robert Dotchin wrote that the senator requested talking points on Emergent that he could use on a C.D.C. visit.
Lobbyist Email to Senator Roy Blunt's Office
By the time of that email, Emergent’s employee political action committee had donated $10,000 to Mr. Blunt, who was up for re-election. Less than a week later, the Alliance for Biosecurity gave him its Congressional BioSecurity Champion Award.
A spokeswoman for Mr. Blunt said he did not intervene on the company’s behalf.
Emergent executives, meanwhile, warned that there could be job losses at the factory in Lansing, Mich. — the capital of a swing state at the center of a contentious presidential campaign between Mr. Trump and Hillary Clinton. In calls with federal officials, Emergent executives also said the company might have to downsize and stop supplying some products to the stockpile, according to two public health officials who participated in the conversations.
“They were pouring it on — how poor they were and how this was going to ruin the company, and they’d have to close down factories, and America was going to be left without anthrax vaccine,” said one of the officials, Rick Bright, who held top positions in both the Obama and Trump administrations.
For health officials overseeing the stockpile, including Dr. Lurie and Dr. Hatchett, who were also on the calls, this posed a quandary: Should they divert money to Emergent that could otherwise help prepare for other disasters?
Dr. Hatchett said the idea gave him pause. But, he explained in an interview, “if there’s only one partner that can provide a product and only one customer for that product, the customer needs the partner to survive.”
In the end, the government came through with what amounted to a $100 million bailout, dipping into the budget of an agency created to develop new products for the stockpile, the Biomedical Advanced Research and Development Authority, also known as Barda.
Just a year later, Emergent spent about $200 million in cash, and made other financial commitments, to acquire Sanofi’s smallpox vaccine and GlaxoSmithKline’s anthrax treatment, two products with established pipelines to the stockpile. The purchases expanded Emergent’s hold over the reserve.
Ms. DeLorenzo said the acquisitions did not suggest the company was better off than it had claimed, but Dr. Bright said he and others involved in the bailout felt used.
“We were all like, What happened to ‘We’re desperate and we need the money not to shut down’?” he said.
‘Speak the Government’s Language’
The guaranteed market provided to Emergent has been largely unavailable to companies selling protective gear and other products intended for an outbreak like the coronavirus pandemic.
Companies that make respirator masks, for example, have been unable to match anthrax on the list of the stockpile’s highest priorities, interviews and documents show.
One business, American Medical Depot, pitched a reusable mask to the stockpile in 2016. Federal officials expressed interest but said there was no money, according to a former company executive.
“They knew that this was a solution for a problem,” said the former executive, Akhil Agrawal. “I just don’t know that the problem was prioritized high enough to get the funding.”
Last April, as health care workers pleaded for protective gear, American Medical Depot’s masks became an urgent priority, and the government placed an order for 10 million. But by summer, while the company was facing manufacturing challenges from the pandemic, the deal fell through.
And a plan five years earlier to create an emergency supply of N95 respirators was simply not funded. A team of experts had proposed buying tens of millions of the masks to fill the gap during an outbreak until domestic manufacturing could ramp up, according to five officials involved in the assessment, which has not been previously disclosed.
The masks were supposed to be purchased with money left over after the stockpile acquired higher-priority items. But that never happened. Even the N95s distributed to states and hospitals during the H1N1 outbreak in 2009 were not replaced. By the time the novel coronavirus emerged, the stockpile had only 12 million of the respirators. The stockpile has since set a goal of amassing 300 million.
Dr. Kadlec, the Trump administration official overseeing the stockpile, said he used the previous administration’s mask recommendation to raise alarms as early as 2018.
“Holy smokes, we’re in arrears,” he said, recalling his message to the White House budget office. He requested additional funding to buy masks but was refused, he said, and he was unwilling to free up money by reducing the supply of anthrax vaccines.
Emergent’s dominance has also frustrated companies seeking funding from Barda, the research agency devoted to developing new products for the stockpile.
Dr. Annie De Groot, chief executive of the small vaccine company EpiVax, spoke about the need to break Emergent’s lock on research dollars at a biodefense forum in 2015.
She advocated investing in more modern technologies — including those now being used for Covid-19 vaccines — developed by companies like hers.
“I realize that many of these ideas may not sit well with incumbents in the vaccine industry, including some of the folks who are present in this room,” she said. Emergent’s chief executive at the time was seated a few feet away.
The situation is no better six years later, Dr. De Groot said in an interview.
“Politicians want to look like they’ve addressed the problem,” she said. “But we need to actually listen to the scientists.”
Over the last five years, Emergent has received nearly a half-billion dollars in federal research and development funding, the company said in its financial disclosures.
“We know ahead of time when funding opportunities are going to come out,” Barbara Solow, a senior vice president, told investors in 2017. “When we talk to the government, we know how to speak the government’s language around contracting.”
The company used federal money to make improvements to BioThrax, and also found a way to earn government money from a competing anthrax vaccine it had excoriated. After the demise of VaxGen in 2006, Emergent bought the company’s unfinished vaccine and in 2010 persuaded the federal government to continue paying for research on it. The firm’s top financial officer twice raised doubts about it to investors and told them on one occasion that it amounted to “throwing away money,” according to transcripts of conference presentations.
By the time the research contract was canceled in 2016, Emergent had collected about $85 million, records show. The company then shelved the vaccine. “If the U.S. government withdraws funding, we re-evaluate whether there is any business case for continuing,” Ms. DeLorenzo said.
‘Checking the Box on Anthrax Vaccines’
On a steamy evening in June 2019, Dr. Bright, then a senior public health official in the Trump administration, met with Emergent executives at the company’s Washington offices adjoining the Willard Hotel, a choice address with sweeping views of the Washington Monument.
The gathering was billed as a meet-and-greet with Mr. Kramer, who had recently taken over as chief executive. Looming in the background, however, was an impending decision by Barda, overseen by Dr. Bright, that could make or break Emergent’s financial projections and long-term goals.
The company had beaten back the Obama administration’s attempts to buy less BioThrax. The threat now was competition for a new vaccine.
For more than 30 years, the government had been encouraging the development of a BioThrax replacement. In 2002, the Institute of Medicine had concluded that an alternative based on more modern technology was “urgently needed.” By 2019, there were three leading candidates, including one made by Emergent, known as AV7909.
On the surface, Emergent’s vaccine looked similar to those of its competitor. Early research indicated that all three options guarded against anthrax with two doses.
But Emergent’s candidate was hardly the breakthrough the government was seeking, former health officials said. AV7909 was essentially an enhanced version of BioThrax. The competitors were using more modern technology that could produce doses more rapidly and consistently, and were promising significant cost savings for the stockpile.
Emergent’s strategy was to skirt those issues by being first.
A company official had told financial analysts that if its vaccine was ready ahead of the others, the government would be “checking the box on anthrax vaccines, and moving on to some of the other threats.” And weeks before the Willard meeting, Emergent predicted in an earnings call that the government would use its emergency authority to buy AV7909 even before regulators approved it.
To qualify for emergency authorization, a vaccine must be at an advanced stage of development with no approved alternatives. Emergent acknowledged in its financial disclosures that there was “considerable uncertainty” whether the new vaccine met those requirements.
But the company had a well-placed connection in the federal government.
‘Give the Lobbyists More Say’
The election of Mr. Trump as president was good news for Emergent.
Dr. Lurie, the senior health official in the Obama administration who had tried to scale back BioThrax purchases, was out. Mr. Trump’s pick to replace her was Dr. Kadlec, a career Air Force physician and top biodefense official in the Bush administration who was fixated on bioterrorism threats, especially anthrax, current and former officials said.
Dr. Kadlec had also previously worked as a consultant for Emergent, as reported earlier by The Washington Post. In an interview with The Times, Dr. Kadlec said he was paid “several thousand dollars a month” in 2013 and 2014 to speak at international conferences about biodefense products.
Soon after entering the Trump administration in 2017, Dr. Kadlec took a series of actions that he characterized as streamlining a cumbersome bureaucracy but that had the effect of benefiting Emergent.
He assumed greater control of purchasing decisions, diminishing the authority of the Phemce, the oversight group that had proposed buying less BioThrax. And in 2018, he backed a decision to move control of the stockpile to his office in the Department of Health and Human Services and away from the C.D.C., which is based in Atlanta and prides itself on being insulated from the influence of lobbyists.
Dr. Frieden, the former C.D.C. director, was strongly opposed. The move, he said, “had almost as an explicit goal to give the lobbyists more say in what got purchased.”
A key decision landed before Dr. Kadlec’s office in 2019: whether to purchase large amounts of Emergent’s new, unlicensed anthrax vaccine. While the details of the contract were handled by Dr. Bright’s agency, his boss, Dr. Kadlec, said he made the final call.
That July, the government made the announcement Emergent had been banking on, committing to buying millions of doses. Separately, it said it would stop funding Emergent’s competitors.
Dr. Kadlec said he did not want to pay to continue researching other vaccines when Emergent’s was further along in development. By replacing a vaccine that required three doses with one that required only two, he said, “you could make a third more money available” for unmet needs.
“There weren’t easy decisions,” Dr. Kadlec said.
The decision to side with Emergent did not surprise Dr. Khan, the former C.D.C. official overseeing the stockpile.
“Again and again, we seem unable to move past an old technology that’s bankrupting the stockpile,” he said.
When the pandemic hit, the AV7909 purchases only accelerated. In 2020, the government spent more than $370 million on Emergent’s anthrax vaccines — the largest sales total for the vaccines in the company’s history.
Last month, as the death toll from Covid-19 neared a half-million, Mr. Kramer, the company’s chief executive, told analysts there had been no “evidence of a slowdown or a delay or a deprioritization,” and echoed a statement he had made in April when asked whether the pandemic might interrupt Emergent’s sales to the stockpile.
“It’s pretty much business as usual,” he said then.
'Be polite and negotiate everything': the TikTok feminist saving people from medical debt
Tori Dunlap, a self-proclaimed personal finance expert, and Shaunna Burns, a former debt collector, tell people how to gain control of debt in 15-60 seconds
by Erum Salam - The Guardian - March 4, 2021
During the Covid-19 pandemic, the greatest crisis of our generation, healthcare has been top of mind for many Americans.
For the one in six Americans drowning in medical bills, reform can’t come soon enough. From riding in an ambulance to delivering a baby, families are regularly hit with thousands of dollars in medical expenses, even when they have health insurance.
In the new Biden administration, progressive politicians such as Alexandria Ocasio-Cortez and Bernie Sanders hope to finally push through a nationalized, universal, single-payer healthcare bill into law. But until some version of universal healthcare is closer to a reality, hundreds of thousands of people are turning to an unlikely place for answers: TikTok.
Tori Dunlap is a 26-year-old self-proclaimed personal finance expert and the founder of HerFirst100k, a brand she says is dedicated to delivering a financial education to women in order to fight the patriarchy. Last year, her TikTok video explaining how to negotiate medical bills went viral, surpassing 100,000 likes.
In her video entitled “Universal healthcare please!”, Dunlap explains that her medical bill, which she believed should have been covered by insurance, was not because it was not “coded” correctly as a preventive visit. This clerical error meant that Dunlap owed $268 for a routine gynecology appointment. She records herself negotiating the bill with the medical office.
Dunlap, originally from Tacoma, Washington, works on building her brand full-time in Seattle. Stories and questions from young people about Dunlap’s tips flooded the comments section of her video. She credits her parents – her father is a salesperson, her mother a homemaker – for her financial education
“My parents taught me about saving money, the potential dangers of credit cards, and how to invest,” Dunlap said. “I negotiate everything. My dad is the master negotiator. I watched my dad growing up negotiate our cable bill, negotiate our car insurance, negotiate our phone bill.”
Her videos come from personal experience. When Dunlap quit her corporate job to run her own business, her insurance changed, which meant some of her visits to the doctor would not be covered by her insurance company. When she was charged hundreds of dollars, she tried to find another way.
“I asked ‘Can you provide a one-time exception?’” Dunlap said. “They gave it to me after me incessantly calling.”
To save time explaining what to say to medical billing departments, Dunlap keeps a free script on her website about how to negotiate common recurring bills.
“What you saw me do on that TikTok [video] is a variation of that script. Be polite. Be cordial. Treat them with respect because they’re people and they deserve it and we’re more likely to get what we want if we’re kind.”
Dunlap said the gynecologist appointment wasn’t the first time she received an outrageous medical bill. “It actually happened two other times,” Dunlap said. “I got charged $700 for a procedure I hadn’t even had yet. I hadn’t even scheduled it.”
Thousands of people may have watched her TikToks, but even those in her own circle benefit. Dunlap’s friend, Kristine Ota, 34, had a $180 medical bill from one doctor’s visit. After watching her friend’s TikTok video, she decided to try negotiating what she owed after visiting a liver specialist that wasn’t covered by her insurance plan.
Ota got on the phone with the billings department at the doctor’s office and asked for a discount for paying that same day. They gave her 20% off. “I always took [medical bills] at face value,” Ota said. “Luckily, I had the money to be able to pay for it. I think it emboldened me to try it again.”
When hospital or doctor’s office bills are left unpaid, collection agencies can purchase the debt in bulk for pennies on the dollar. Shaunna Burns, a former debt collector and Tik Tok creator, also uses her channel to share strategies for dealing with medical debt once it goes into collection. Some strategies include reporting collection agencies if they call outside of business hours, asking for an itemized receipt, and requesting “proof of claim” for the alleged debt.
In one of her TikTok videos, Burns explains that a debt held by a collection agency can expire after a certain amount of time and said sometimes she just “lets the clock run out”. But those statutes of limitations vary by state.
Christine Kingston, a California-based attorney specializing in debt, agrees with Burns’s strategy. “It’s called debt validation. Everyone has a right to ask for evidence of the right to collect a debt before they pay it. It’s under the Fair Debt Collection Practices Act.”
For Burns and Dunlap, making these TikTok videos is about cutting through the complicated fine print and telling people in a 15-60 second format how to gain back control of their medical debt, and financial power.
Dunlap herself saved her first $100,000 back in 2019, just a few years after graduating from the University of Portland. Soon after, she appeared on Good Morning America and quit her desk job to become a full-time money educator. She recalled being the go-to financial adviser for many of her female friends in college.
“I graduated college in 2016. I came into adulthood and womanhood in Trump’s America. I realized just how unequal and inequitable our society is. And a lot of it has to do with money,” Dunlap said. “A financial education is our best form of protest as women. If we can start getting more money into more women’s hands, we can absolutely change the world.”
https://www.theguardian.com/technology/2021/mar/04/tiktok-medical-debt-bills-tori-dunlap?
Trade-offs in Public Health Insurance Design
Trade-offs abound in policy decisions about health insurance. Although the advantages of moving to such a single-payer plan might be appealing, there are large hidden costs that must be considered.
First, having a single health insurance plan to cover the heterogeneous US population can actually make people worse off than tailoring the generosity of benefits to different people’s needs and preferences. In work I carried out with Mark Shepard, PhD, now at the Kennedy School at Harvard University, and Jonathan Skinner, PhD, at Dartmouth College, we highlight that the costs of having a uniform public insurance benefit have increased dramatically since Medicare’s advent in 1965.
One reason for the sharp increase in the costs of having a uniform public insurance benefit is the dramatic advances in health care within the last half century, with many more intensive—and costly—treatments now available. Providing all the care that might possibly be available is a much more expensive proposition now, necessitating forgoing many other things. A second reason is the substantial growth of income inequality. A person with a high income might be willing to devote resources to expensive care of only minimal health benefit, whereas a person with a lower income may need to devote those same resources to housing or education. A third reason is that, as tax rates have risen, the economic cost of raising funds to cover public insurance programs has become much larger.
All of this means that providing the same public insurance plan to everyone would leave segments of the population worse off. This could be higher-income groups, if the public benefit is limited and they are prohibited from going around it; or lower-income groups, if the benefit is comprehensive and too few resources are left to be devoted elsewhere. An alternative that might be better for everyone would be a basic public health plan available to all coupled with increased spending on other social insurance programs for lower-income groups, with the option to augment those benefits with privately purchased wraparound plans—more like the Medicaid-for-all who want it proposal.
A second factor in evaluating the costs and benefits of having a single plan is the trade-offs that are inherent to insurance plan design. Different people value different features in their health insurance, even if the overall generosity of the plan is held constant. Of course, most would prefer lower costs and broader coverage, all else being equal. Although most want the same care but at a lower price, lower cost sharing means higher premiums, whereas narrower networks can lower premiums.
Amitabh Chandra, PhD, at the Kennedy School and the Business School at Harvard University and I explored the answers given by a nationally representative survey sample about what features in a health insurance plan were most important to those surveyed, focusing on the trade-offs among elements such as lower co-payments, more expansive networks, lower premiums, and more comprehensive coverage. People were remarkably divided in their preferences about those dimensions, and given the option, they would make different choices about their insurance coverage.
The impetus for a single-payer plan is often not only the hope of reducing costs but also the goal of expanding coverage. The same survey suggests that altruistic concern for other individuals’ access to care, encouragingly, cuts across the political aisle. Faith in whether the government or the private sector is best able to effectively provide that care is much more sharply divided.
Another potential drawback of having a single plan is that competition among plans has the potential to drive down costs and accelerate innovation. This requires true competition within the insurer market, as well as among clinicians, hospitals, and other health care facilities, which is not the case in many parts of the country. There is genuine debate to be had about the potential for the introduction of a public option to increase choice and competition to promote higher value.
The costs of a single, expansive public program point to the potential benefits of giving enrollees a choice among insurance options—free or heavily subsidized for lower-income populations—to expand coverage while allowing people to make choices that reflect their priorities and drive value. There is an example along these lines in the Medicare Advantage system already in place, and most patients enrolled in Medicaid receive their insurance through privately managed plans.
None of this is meant to say that the current system is serving the US population well now. Individuals are paying more and getting less than they should—and this is particularly true for vulnerable populations. Instead, acknowledging the societal value of expanding coverage and increasing affordability, as well as the unavoidable trade-offs involved in the design of public programs, would move the country toward implementing a fiscally sustainable, high-value public insurance safety net.
https://jamanetwork.com/journals/jama/fullarticle/2776866
Private Insurance Wins in Democrats’ First Try at Expanding Health Coverage
‘Medicare for all’ and the public option were hot topics during primary season, but the politics of passing those “gets tricky really fast.”
by Sarah Kliff - NYT - March 5, 2021
Democrats spent much of the 2020 presidential primary debating the best way to expand public health insurance. They sparred over whether to enroll everyone in public coverage — the preferred policy of Senator Bernie Sanders — or to give everyone a choice to do so, the public option plan that President Biden supports.
The candidates repeatedly proposed a future in which private insurers play a diminished role in the American health system — or no role at all.
But the first major legislation of the Biden administration, if it passes in the Senate, moves in the opposite direction: It proposes spending billions to expand private health insurance coverage to millions more Americans.
The American Rescue Plan, a $1.9 trillion stimulus package that the House passed last week, would increase government subsidies to health insurers for covering recently laid-off workers and those who purchase their own coverage.
The new subsidies do not preclude future legislation that could make public plans more available. Some congressional aides say they are already laying groundwork for the inclusion of a public option plan in a legislative package expected later this year. And the stimulus package does introduce an incentive for states to expand public coverage through Medicaid, though it is unclear whether any states will take it up.
The decision to start with subsidizing private insurance shows how it can often be the path of least resistance when legislators want to expand coverage. The changes can slot neatly into a pre-existing system, and tend to garner support from the health care sector (which benefits).
“The politics of expanding public coverage in a way that would shift people to public insurance gets tricky really fast,” said Karyn Schwartz, a senior fellow at the Kaiser Family Foundation. “There are very concrete losers: the providers who would see their payments go down.”
Private health plans cover 176 million Americans, outnumbering the combined enrollment of Medicare and Medicaid. The stimulus plan would probably increase private insurance sign-ups by a few million people with the new subsidies it provides to those buying their plans.
The American Rescue Plan spends $34 billion expanding the Affordable Care Act subsidies for two years. The changes would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees.
The stimulus package also subsidizes private health insurance premiums for newly unemployed workers. They typically have the opportunity to purchase their former employers’ health benefits through a federal program called COBRA, which can often be prohibitively expensive because the employer is no longer paying a share of the worker’s premium.
The legislation that the House passed would cover 85 percent of COBRA premiums through September. The Senate plans to bump up the amount to 100 percent, meaning the government would pay the full cost of premiums. The Joint Committee on Taxation estimates the more generous Senate version will cost $35 billion.
There is not yet an estimate of how many people would gain coverage under the Senate plan, but the Congressional Budget Office did estimate that the original House version would reach 2.2 million former workers.
These policies have moved forward easily and with little opposition. The health care industry has generally supported the changes because private health plans typically pay higher prices to doctors and hospitals. Democrats who support expanding public coverage generally describe these changes as low-hanging fruit — the changes they could accomplish quickly to expand coverage.
But some progressives have questioned the decision to route patients into private health plans, which will cost the government more because of the high prices they pay for care.
“I don’t think this was the most efficient way to do this,” said Pramila Jayapal, a Democratic congresswoman from Washington State, who is the lead sponsor of the House’s Medicare for All bill. She proposed legislation that would have allowed unemployed Americans transition to Medicare rather than staying on their former employers’ plans.
This did not move forward. Nor has a plan from Senators Tim Kaine and Michael Bennet to create a version of Medicare, which they call “Medicare X,” available to all Americans.
In recent years, Democrats have increasingly embraced the idea of a large expansion of public health benefits. The public option would give all Americans the option to sign up for a Medicare-like plan, and a “Medicare for all” program would move everyone to a government health plan.
Polling shows public support for each idea also going up, with the public option tending to rank more favorably than Medicare for all.
Those types of public coverage expansions tend to be politically divisive in Washington. They often draw fierce opposition from the health care industry for the same reason supporters like the policy: They would be disruptive, and significantly reduce fees paid to hospitals and doctors.
A Kaiser Family Foundation report this week estimated that total health spending for those with private insurance would decline by $350 billion in a year if those private plans paid claims at Medicare rates.
“You can’t take $350 billion from a system and expect it to look exactly the same,” said Ms. Schwartz, an author of the report. “Every time I drive past a hospital, I see a big construction project. You’d probably see less of that.”
In coming years, Democrats will probably confront more decisions about how to expand coverage. The new Affordable Care Act subsidies expire at the end of 2022, setting up a figurative cliff in which premiums would go back up if Congress did not act.
Democrats could use the moment to make those changes permanent, further solidifying the role of private health insurance. If enrollees find themselves satisfied with their increasingly subsidized plans — if they perceive the coverage as more affordable because the government pays a bigger share of the tab — the urgency to expand public coverage may lessen.
“Sometimes the path of least resistance is self-reinforcing,” said Jacob Hacker, a political scientist at Yale who helped develop the public option plan supported by Mr. Biden.
But legislators could find themselves balking at the price tag. Making the subsidy permanent would most likely cost hundreds of billions. That could push the party to think about the cheaper but more politically challenging route of expanding public plans.
Which way the party goes could depend on whether Democrats continue to hold a majority in both chambers of Congress, and if the caucus can unite around expanding public coverage in the same way it has around increased spending on private plans.
“It’s revealing that they’re sun-setting the expansion of subsidies, and not dealing with the longer-term challenge of how do you finance this,” Professor Hacker said. “Their plan to bolster the A.C.A. is the path of least resistance, but it’s a path that only takes you so far.”
Obamacare’s About to Get a Lot More Affordable. These Maps Show How.
For this year and next, the stimulus bill boosts subsidies for nearly all those buying their own coverage, making insurance free for more people and giving higher-income people discounts for the first time.
Kevin Quealy and
For this year and next, the stimulus bill boosts subsidies for nearly all those buying their own coverage, making insurance free for more people and giving higher-income people discounts for the first time.
Under the stimulus bill passed by Congress this week and set to be signed by President Biden on Friday, nearly all those who buy their own insurance are eligible for a discount.
Decrease in monthly insurance price, under the stimulus bill
No change
$100 less
$250 less
$500 less
$750 less
$1,000 less
At age 27
$19k per year
age-27 income-19k
$35k
$35k
age-27 income-35k
$60k
age-27 income-60k
$100k
age-27 income-100k
At age 40
age-40 income-19k
age-40 income-35k
age-40 income-60k
age-40 income-100k
At age 60
age-60 income-19k
age-60 income-35k
age-60 income-60k
age-60 income-100k
Prices shown are premiums after federal subsidy payments.·Source: Kaiser Family Foundation
The American Rescue Plan broadens the subsidies available under the Affordable Care Act for comprehensive health insurance — increasing them for people who are already eligible, and providing new assistance for people with incomes previously too high to qualify. The top set of maps, drawn from calculations made by the Kaiser Family Foundation, show how much the changes will reduce what people pay for health insurance around the country, depending on their location and age.
The changes mean small adjustments for some Americans and very substantial ones for others. For anyone earning around $19,000, subsidies will now be generous enough to sign up for a typical plan with no monthly payment. For someone earning over $51,000, new subsidies could lower premiums by as much as $1,000 a month in the country’s most expensive markets.
Some groups still won’t qualify for help: undocumented immigrants, and poor Americans in states that have not expanded Medicaid under an option provided by the Affordable Care Act. But a large majority of uninsured Americans can now get financial help buying insurance, according to Cynthia Cox, a vice president at Kaiser.
“What this law will do is make it so the majority of uninsured citizens are eligible for free or low-cost coverage,” she said. “This won’t bring us to universal health care, but it will bring us closer to universal eligibility for subsidized health insurance — for two years.”
New monthly price for a typical plan
No cost
$100
$200
$300
$400
$500
At age 27
$19k per year
age-27 income-19k
$35k
age-27 income-35k
$60k
age-27 income-60k
$100k
age-27 income-100k
At age 40
age-40 income-19k
age-40 income-35k
age-40 income-60k
age-40 income-100k
At age 60
age-60 income-19k
age-60 income-35k
age-60 income-60k
age-60 income-100k
Prices shown are premiums after federal subsidy payments.·Source: Kaiser Family Foundation
The maps here show roughly how much Americans who buy such plans will need to pay each month under the new rules. All the eligible plans must cover a standard set of comprehensive benefits, including prenatal care, prescription drugs and mental health services — more coverage than is available in the short-term plans or health-sharing ministries that some middle-income Americans are currently enrolled in.
To qualify for the new benefits, people need to sign up for plans at Healthcare.gov or a state exchange website. The changes will be retroactive to Jan. 1, meaning that people who already have Obamacare plans will get money back. Anyone who is uninsured now can qualify for new prices as soon as they sign up. But experts say it may take a little while for the subsidy changes to show up on Healthcare.gov. If you sign up right away, you may have to pay the old price for the first month and wait for a refund.
If you are receiving unemployment insurance, the legislation entitles you to a special discount: Regardless of your income, your premiums will look similar to that of the person earning $19,000 on our maps. And if you lost your coverage at work and want to keep it, the bill will also pay the full cost of your premiums for six months under the federal COBRA program.
Notes: Premiums and subsidies displayed here are for individuals buying a silver plan at the second-lowest price in their market. But subsidies are calculated differently depending on family sizes. A family of four earning around $40,000 would pay the same premium as an individual earning $19,000, for example.
In a handful of states, people earning $19,000 won’t qualify for new subsidies because they already qualify for other low-cost state insurance programs — Medicaid in Alaska, Hawaii and the District of Columbia; and the basic health plan in Minnesota and New York (the basic health plan is Medicaid-like coverage with low premiums for a sliver of low-income Americans in certain states).
If you want to calculate the premium you would pay for your income, household size and location, this online tool may be helpful.
Here are answers to other frequently asked questions about the stimulus package.
Maine official warns against Affordable Care Act enrollment scams
'We've received complaints from consumers who purchased plans they thought provided comprehensive coverage, but that actually have very limited benefits,' says Insurance Superintendent Eric Cioppa.
Staff Report - Portland Press Herald - March 4, 2021
Maine Insurance Superintendent Eric Cioppa is urging residents who don’t have health insurance to buy coverage during the special Affordable Care Act open enrollment period that runs until May 15, but he also warned them to be aware of potentially deceptive sales practices.
“Mainers should be sure to use trustworthy sources to get the best health care coverage at the best price,” Cioppa said in a news release. “We’ve received complaints from consumers who purchased plans they thought provided comprehensive coverage, but that actually have very limited benefits.”
Cioppa said consumers are sometimes confused by online ads and phone solicitations urging them to buy an insurance product, or are taken advantage of by deceptive sale practices. He noted that the only comprehensive health plans approved for sale directly to individuals in Maine are offered by Anthem HealthPlans of Maine, Harvard Pilgrim Health Care and Maine Community Health Options.
Comprehensive health plans are those that provide broad coverage for a wide range of health services such as office visits, lab work, emergency room visits, hospitalizations and medications, he said. Unlike other plan types that may be sold, comprehensive plans also are required by law to pay for a certain percentage of medical costs.
Cioppa recommended Maine’s online health insurance marketplace, CoverME.gov, to those shopping for individual plans. Those without internet access can seek help by calling (800) 965-7476, he said.
A $22,368 Bill That Dodged and Weaved to Find a Gap in America’s Health System
Bad news for one unlucky patient is also a stark example of how dysfunctional U.S. health coverage can be.
by Sarah Kliff - NYT - March 10, 2021
John Druschitz spent five days in a Texas hospital last April with fever and shortness of breath. It was still the early days of the pandemic, and doctors puzzled over a diagnosis.
They initially suspected coronavirus and hung signs outside his door warning those entering to wear protective equipment. Mr. Druschitz had already spent two weeks at home with worsening symptoms. He recalls one doctor telling him, “This is what it does to a person.”
Ensuing lab work, however, was ambiguous: Multiple molecular tests for coronavirus came back negative, but an antibody test was positive.
Doctors found that Mr. Druschitz had an irregular heartbeat and blood clots in both his lungs. They sent him home on oxygen, and ultimately did not give a coronavirus diagnosis because of the negative tests. He didn’t think much about the decision until this fall, when he received a $22,367.81 bill that the hospital has since threatened to send to collections.
“I thought everything was good to go, and then I get the first bill in October saying I owe $20,000,” said Mr. Druschitz, 65, who retired in December.
Working with a patient advocate, he discovered that his debt stemmed in no small part from his diagnosis. Not having a coronavirus diagnosis disqualified his hospital from tapping into a federal fund to cover bills for people who do.
Mr. Druschitz ultimately fell slightly short of qualifying for multiple federal health programs that would have paid for his care if the details had been slightly different. Health policy experts see his experience as a case study in how easily patients can fall through the cracks of America’s fragmented health insurance system.
“It shows the insanity of having a health care system where literally the clinical diagnosis determines whether someone is going to get bankrupted,” said Dr. Ashish Jha, dean of the public health school at Brown University.
Mr. Druschitz is among more than 600 people who have submitted medical bills to a New York Times project tracking the high costs of coronavirus testing and treatment. If you have a bill to submit, you can do so here.
Most developed countries have a national system that provides health coverage to all residents. Some, like Britain, use a public health plan. Others, like Switzerland, rely on private insurers to cover all citizens with robust medical benefits.
The United States’ health coverage system is more of a patchwork: People qualify for different health programs depending on their age, employer and health status. The Affordable Care Act has increased coverage in recent years, but 29.6 million Americans still remain uninsured.
Mr. Druschitz was briefly among those uninsured millions. On the day the hospital admitted him, he was 64 years old, 23 days away from qualifying for Medicare. He had mistakenly terminated his private health plan, which he had purchased on the Obamacare marketplaces, one month early.
“My whole life I had insurance except this one month when all this happened,” he said.
If Mr. Druschitz’s hospital visit had happened 24 days later, Medicare would have covered the vast majority of the costs regardless of the diagnosis.
Because he was uninsured, the hospital did send a letter less than a week after discharge offering to “help apply for medical assistance through various government programs.” Mr. Druschitz hadn’t yet received a bill at the time. When it did arrive, six months later, he was told that offer had expired.
A third source of federal funding would have become available if the hospital had determined he had coronavirus: the Covid-19 Uninsured Program.
Created last spring, the program pays the medical bills of coronavirus patients who lack health coverage. It reimburses hospitals at the same prices that Medicare pays medical providers.
It has faced some criticism from hospitals and patients for being too narrow, and for covering bills only where coronavirus is the primary diagnosis. A patient with a primary diagnosis of respiratory failure and a secondary diagnosis of coronavirus would not qualify, for example.
The Health Resources and Services Administration, which runs the federal fund, does not have plans to change that policy. So far, it has spent $2 billion to reimburse health care providers for the bills of uninsured coronavirus patients.
“The H.R.S.A. uninsured program is a voluntary claims program, not an insurance program,” said Martin Kramer, an agency spokesman. “The scope is narrow, and its primary function is to help combat Covid-19 by removing financial barriers.”
The hospital that treated Mr. Druschitz — the Baylor, Scott and White Medical Center in Austin, Texas — did not submit his charges for reimbursement because of the negative coronavirus tests, said Julie Smith, a spokeswoman.
“The nucleic amplification Covid-19 test is the standard to diagnose or rule out Covid-19,” she said in an email. “Because the diagnosis for this admission was not Covid-19, his hospital stay is not eligible.”
The positive antibody test, she said, “may indicate a previous infection.”
The hospital has submitted other claims to the uninsured fund, and has so far received a quarter-million dollars in reimbursement. It has applied a 40 percent uninsured discount to Mr. Druschitz’s $34,058 charge. It’s not clear from his billing codes whether the hospital is pursuing him for a larger amount than what the federal fund for uninsured people would have paid.
Multiple clinicians with expertise in Covid-19 reviewed Mr. Druschitz’s medical records for The New York Times. They said that his case was ambiguous: It wasn’t completely clear whether coronavirus had caused his symptoms.
“There is a good chance that he did have Covid-19, and I base that on the fact that his symptoms are consistent with that diagnosis,” said Dr. Alexander McAdam, an associate professor of pathology at Harvard. “The lab data, however, don’t definitively demonstrate that.”
Dr. McAdam was not surprised that a Covid test at the hospital could come back negative even when Mr. Druschitz was very ill.
“People can have persistent symptoms even after the virus is no longer detectable,” he said. “It could be the virus is now in the lower respiratory tract but not the upper,” meaning it might not show up on a test.
But he and Dr. Jha, who also reviewed the records, said they would have expected an earlier test, conducted 10 days before his hospital stay, to be positive. It would be unusual for a test to be negative at that point, as Mr. Druschitz’s was, when he was already symptomatic.
“It’s more likely than not that he did not have Covid, but it’s certainly not a zero chance,” Dr. Jha said. “The fact that it will end up making a big difference in the bill is really problematic.”
Mr. Druschitz’s primary care provider, Dr. Craig Kopecky, who saw him shortly before and after the hospital visit, says that the diagnosis is wrong and that his patient did have coronavirus.
Dr. Kopecky initially suspected bronchitis when Mr. Druschitz came to his office in mid-April with a cough and some shortness of breath. He began to suspect Covid in a follow-up telemedicine visit 10 days later.
“At that point he’d started to lose some of his sense of taste,” he said. “I couldn’t examine him because it was telemedicine, but I could clearly hear him struggling to breathe.”
Dr. Kopecky submitted his bills for Mr. Druschitz’s treatment to the federal fund for uninsured patients, and said he received reimbursement.
The patient advocate that Mr. Druschitz retained, Jan Stone of StoneWorks Healthcare Advocates, has asked the hospital to re-evaluate the diagnosis. She’s now running up against a deadline: Hospitals have one year to submit claims to the uninsured fund. This means the hospital would need to file for reimbursement within the next six weeks.
“The clock is definitely ticking,” she said.
https://www.nytimes.com/2021/03/10/upshot/covid-bill-health-gap.html?referringSource=articleShare
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