Virtual Seminar: Health Insurance Coverage in the Aftermath of COVID-19 / HealthChoice

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welcome everyone to the Leonard Davis Institute's virtual seminar series I am Rachel Warner I'm LD i's executive director today we will be having our final seminar series in a series of covin related virtual seminars that we've posted over the past few months we'll be talking about health insurance coverage in the aftermath of kovat 19 to the top off the seminar series for the four June we're gonna be taking a break from over the summer from these seminars

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but please remember to join us in the fall and we'll start back up with a line of exciting additional seminars the day's seminar is going to be moderated by Dave brandy who is LD i's director of policy and I will turn it over to him now Thank You Rachel and I would just like to echo saying good afternoon and welcome to this seminar we do plan today to discuss the future of health insurance coverage in America you know and as the audience knows there's been massive disruptions occurring as a

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result of copán 19 if we go back as far as the 1950s employer-based health insurance has been the bedrock of private insurance in the United States and certainly Medicare and Medicaid stepped in during the 1960's to fill large gaps in the system and then of course the Affordable Care Act in the past decade has attempted to fill in even more gaps in the system but now the country is facing unprecedented job loss and with that millions of Americans are losing health insurance the Robert Wood Johnson Foundation and the Urban

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Institute recently estimated somewhere between 25 and 43 million people are likely to lose their health insurance as a result of employer-sponsored will lose their employer-sponsored insurance as a result of job loss there are enormous questions about whether the nation has an adequate safety net to ensure that people can obtain alternative coverage whether they can access the care they need and do so without facing catastrophic financial hardship and that is really the essence of what we will talk about today we have four great

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panelists and let me go had an introduce all four before we jumped into our conversation today first we have Larry Lovett he's the executive vice president for health policy at the Kaiser Family Foundation and he leads their work related to public insurance in the Affordable Care Act he was previously editor in chief at Kaiser Network org and worked in the White House during the Clinton administration next up is mark Pauley mark is the ben-haim professor in the department of healthcare management here at Penn in the Wharton School is

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one of the nation's leading health economists and international experts on health insurance economics next up we have Jamila Taylor Jamila is the director of healthcare reform at the Century Foundation and she leads their work on planning next steps for health reform to build on the Affordable Care Act she is an expert on women's health reproductive rights and justice and racial and gender disparities and health and she was previously at the Center for American Progress and before that of global NGO focused on women's health and

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lastly we have hemi Torsen as the director of the National Governors Association Center for best practices Health Division and there she works on Medicaid healthcare delivery and payment reform opioids behavioral health and social determinants of health and she previously worked as a senior attorney in the office of the general counsel at Gao let's go ahead and jump into our discussion today and I want to start with a rather broad question before we get into a lot of the specifics about

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what's going on with health insurance today and some potential policy approaches but the big picture question which is how is covet overall impacting health insurance in America and who is being impacted most and and what might that mean for health and healthcare you know in the immediate future and so I want to kick that first question to Larry to get us started thanks David and thanks thanks for having me um you know it's a I think the important thing to think to remember is that we we have a double whammy right

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now of a public health crisis and an economic crisis and that those are both having tremendous effects on health insurance coverage the first as you mentioned is that we are seeing historic job losses and that could lead to substantial historic increases in in the number of people uninsured anecdotally many employers are preserving health benefits for laid off or furloughed workers so I don't think we have yet

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seen a big increase in number of people uninsured but if the unemployment rate remains high that that could certainly be coming and and you mentioned estimates I mean we could see you know tens of millions of people losing job based insurance at the same time the the public health crisis and the social distancing measures that have been put in place to deal with it have really upended the health care system in a way that we have never seen before you know

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in in the middle of epidemic providers are losing money because of declines in non urgent procedures I mean tremendous declines and non-urgent procedures I mean we saw a huge drop in in health care use in revenues in in late March April and May and that has had the somewhat unexpected effect of of insurers you know flush being flush with

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money but ago insurers are not paying claims so insurers are you know looking for ways to spend any talking about premium rebates to avoid some of the rebates they'll be required to provide to consumers and businesses under the Affordable Care Act's medical loss ratio provision so you know this this this combination of a public health crisis and an economic crisis has really has really upended the health insurance thanks Larry and I think we'll come back

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to that question of you know how insurers are managing their both short-term and long-term financing finances a little later in the conversation Hemi I want to make sure we look at the states in this conversation as well but many states obviously like a very term effect of what we're going through right now is a collapse of state budgets but if we see a lot of these impacts on employer sponsored insurance plight out as we expect it might we'll also see of

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course a lot of demands on safety net insurance programs Medicaid in particular run by the state so how are you know what's going on in the state's one of the conversations right now how are states looking at this looming budgetary crisis well thank you for having me and it's such an important question I'm so pleased to be here as part of this discussion so you know for those of you who don't who aren't familiar with NJ we represent all governor's across you know Republican and Democratic parties and they have been meeting weekly through our

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association which is somewhat unprecedented they don't usually do that because of the nature of of what's been happening with over nineteen and just the significance of it and you know every conversation is about budget in some way shape or form and then also of course how are they responding to the public health crisis and I would say you know in in the shorter term and longer term that is going to be the issue so you know face right now they have to balance their budget they're not the federal government they have to balance it within a one or two year window

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depending on the structure of their state and that means there is no borrowing I mean they have to make really hard decisions about knowing that they're going to have really big shortfalls in their state revenue they're you know things like tourism and some of the you know economic drivers that they have in their states that are not going to be at the level that they were just a few short months ago we were talking about states who had millions and millions of surpluses are you know going to have millions and millions in deficits just in this in this next year

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and so one of the things that we've been talking to the governor's about and they've really been thinking about is how do we plan for that and with respect to coverage you know they I do think they expect their Medicaid rolls will increase significantly I think they expect their exchange population will also increase significantly with through the state subsidies because people will lose jobs now now you know how that economy comes back in the fall you know they're different predictions and you know they're different things that are that

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are being you know assumed you know maybe we won't have a way to maybe we will you know there will be a different than that but if you look right now with the unemployment numbers even within the state employees they're very high in some of the areas where they have made some cuts now maybe short term because of of what's happening with schools are with the teachers so there has been a fair number of teachers that have been laid off you know they may well get hired back in the fall I think that's all to be determined but I think one of the things that we are most concerned

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about is without additional stimulus money and that's why NJ has a request to Congress for five hundred billion dollars and that's the crosswalk governor's conservative and progressive alike they really feel the need for that that stimulus money to help jumpstart their economies which they think they know are going to be in pretty significant very looking forward I also think you know in the shorter term there's what's happening within you know 2021 but I think for some states and you know you there's a communist on these

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line so I'm not an economist but there is some predictions that it will take you know 3 to 5 years for some of these states to get back to where they were so it's a really significant concern all right thanks for that and maybe just as a quick follow-up you know does it seem like there's any growing political momentum around federal support for state budgets at this point or is that still kind of stuck at the moment I mean we are certainly still lobbying pretty

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hard from an energy perspective for that $500 500 and stimulus we also are requesting an enhanced federal medical assistance percentage F map for Medicaid up to 12% because that is also an important economic driver for states so that is also part of our package and we also are continuing to advocate for unemployment insurance I think there is some conversation continue to go on I think it's at a slower pace I don't think we'll see something happen quickly but our perspective is that communication lines are still open and I

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think there's an appreciation we had three governors testify last week in Congress about what's happen with timid and they certainly talked about this aspect of it and more conversations are going on on that front so I you know what hopeful something will happen mark let me ask you you know as I mentioned in the opening obviously employer-based health insurance has been really the cornerstone cornerstone of health insurance market for decades in this country do you think what's there are many ways everyone's talking about

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how kovat may permanently transform some aspects of American society is this a part that will be permanently transformed if people if there really is disruption in employer-sponsored insurance like do we think that the mix of public and private coverage may end up changing as a result well so I give the standard economists answer it all depends but it depends on two things one is well what is going to happen with the employment situation

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it's 13% unemployment the last number that there's some hidden unemployment because some people as Larry mentioned are being paid even though they're not working but they're still getting their health insurance so it's not it's not yet a problem for their health insurance and at least the most pessimistic forecasts I've seen I'm not going to take the blame for any macro forecast was from your own pal it killed the stock market this week saying you know

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by the end of the year we might be at around 10% unemployment so we're not talking about great depression numbers I don't think although it's always worries some my dad worried about in this whole life we're talking about Great Recession numbers which are more like a 10 percent 9 percent unemployment rate and the one message we have from past history is that that event did not provoke a dramatic change in job based insurance and one way to think about that is if

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10% and that's kind of what we would be talking about 10% more people would lose their job-based insurance if they were the only worker and their spouse was not working and all those things well 90% of hee would retain their job-based insurance and I don't know what your view was of the Democratic primary but my view was that I don't have a particular preference at this point of view but it looked like the people who like their job-based insurance won over the people

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who wanted to substitute some other kind of insurance and I guess that's the big that's the big political end though what's the alternative to job based insurance right now if I lost my job you know and had to go to a silver plan on an exchange that's pretty terrible insurance compared to what I have now I wouldn't really want that better than nothing but it's not nearly as good as what I would have now so I wouldn't want to trade trade trade off that way and of

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course it depends on what happens in the election in November and as long as well so who know it's hard to predict politics as it is to predict the economy if not harder but if the Republicans retain control of the Senate I don't see any dramatic change as an alternative and if the alternative is ultimately what Vice President Biden is proposing which is basically Obamacare that certainly helped out in the Great Recession although that didn't really kick in until 2014 a little too late but

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at least it was something I guess I I don't see the rationale for a dramatic change remember employment based insurance isn't a government program although now it's supported by the tax exclusion it was chosen by workers and by unions and their employers voluntarily is a way to get health insurance at a low price and of course it was as I said the pot was sweetened by the fact that you could get

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a tax break so the my punchline is objectively I don't see unless the recession becomes a catastrophe in which case everything's at risk including you know the government is going to have to provide you with housing the government will have to provide you with food that everything will be at risk if we don't go there and golly I sure hope we thought if we have a recession mild is not the right word because you never want to have a recession but a set of a Great

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Recession style downturn objectively I don't see a strong rationale for changes and politically of course your guess is as good as mine but I wouldn't guess that there'd be a revolution there either thanks mark Amelia I want to ask you you know you've done a lot of work looking at structural barriers to access to care racial and gender disparities and health outcomes the relationship between health care and

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economic justice we know that kovat 19 has taken a real severe economic and clinical toll on communities of color and what sort of policy changes at the federal or state level are needed to really help mitigate both the extensive job and insurance losses in the communities along the lines of what we're talking about you know I intern to these conversations you know with the fact that you know the situation for people of color in this

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country in terms of both health care coverage and the economic challenges were there before coab in 19 so I think it's important to sort of put that fact out there to ground the conversation COBIT 19 has made things much worse for these populations so we're seeing an overwhelming majority of frontline workers and essential workers are women and people of color and so as the conversation moves forward with the rush

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to reopen I think it's important to say that their safety needs to be first and foremost in any conversations about moving the country forward in that way so wanted to put that out there and so when they are able to get back to work fully and able to do so with dignity and to do so safely we need to first make sure that we have enough testing for everyone the United States has fallen way behind and in terms of ensuring access to testing testing needs to be universal and it needs to be free at

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that's first and foremost we also need to make sure that if folks do fall ill largely our frontline workers that they have access to treatment and that treatment should also be free all workers need to have access to PPE universal paid leave this is something that we've seen particularly in the context of kovat 19 that has fallen way short for these populations working on the frontlines so on one hand they're putting themselves at risk to contract

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live at 19 but they don't have access to the worker protections that they need in case they do fall ill or have to care for a family member that falls ill we also need to ensure you know access to wages that are help these populations thrives and not just livable wages the wages that can help them thrive universal health care is another key piece here so ensuring that all families have access to healthcare that is

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affordable that is not connected to a job I think is also essential we've already talked about in the program today how millions have already lost their access to employer sponsored insurance millions more risk losing that access and so I think as we talk about all of the great gains that we've made through the Affordable Care Act I think it's time to move the conversation towards how can we ensure access to health care for all people that is affordable and as is of the highest

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quality and in the last point that I'll make is access to child care this has been a key component on the childcare industry has been you know pretty much decimated due to the pandemic recession and so there have been calls to increase funding to support the child care community to get back up to where they need to be to ensure that families have access to child care and this also is going to help the parents out there that

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do need to return to work to do so with dignity and with the assurance that their children will be taken care of so those are just a few of the things that we're recommending based on conversations were having with the hill there have been some incremental changes in some of the initial packages to respond to cope at 19 on some of these issues but quite frankly I think most of those packages have fallen way short to address these issues seems like

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in the past couple of days people have there was a degree of complacency that was starting to be evident the country will just reopen everything this first wave has passed and then in the past couple of days I think people are acknowledging the fact that there's a resurgence of kovat I think in 21 states we reported yesterday where we're seeing you know rates go up as opposed to go down do you see that as creating any momentum for some of the ideas that you're talking about to bring these

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policies forward to protect a lot of these workers if you sort of look at this moment that we're in in this country where um you know I think lots of folks are speaking up about sort of broader issues in terms of injustice in this country you know people are also starting to talk about some of these other intersectional issues you know do I have health insurance that is affordable that I can access can I be

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safe in my neighborhoods do I have access to clean water or food in my community so I do think that there is we're in a special moment where you know we're seeing folks that are quite frankly fed up with not having the access to the services and support that they need and this is all interconnected you know having healthcare access is interconnected I would also say that in the media we've seen stories of you know

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frontline workers largely people of color that have been turned away from testing or treatment only to become gravely ill and some of them have actually died due to kovat 19 so when these things have and it's causing communities quite frankly to be upset and to call for these changes so not only are you seeing people protesting you know about these things they're also reaching out to their members of Congress and saying we'd like to see more from you in terms

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of support to recover from coab at 19 we need another round of stimulus checks to support families that are quite frankly struggling right now but we also need to make sure that testing is available to everyone you know as well as childcare and some of these other issues I mentioned so I think it's just an important point in our country right now where everyone is feeling emboldened to talk about the issues that are impacting them personally in health care and kovat 19 the economy these are all things that

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are interconnected as well Larry I wanted to ask you if we look at the affordable care act and the pieces of the ACA that you know we're designed to help fill in some of the very gaps that we're talking about today what do you think the ability is of the way the ACA was designed to kind of step in during this pandemic and fill in the gaps in the cracks and health insurance that are

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that are quickly forming and in what are the parts that are that are missed by the ACA as we think about some of the gaps in policy that needs to be addressed I mean I think you can't overstate the power of the ACA as a safety net in in a recession like this as Mark said the ACA passed and was implemented in the wake of the Great Recession but was really not there as a safety net this is the first economic downturn where where we have the ACA in

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place as that safety net and you know importantly I mean we we recently put the estimates showing that 79% of people expected to lose their job-based insurance as a result of job loss will be eligible for health under the ACA either through Medicaid or through ACA marketplace subsidies so I mean that that's that's enormous and and a you know a cushion that was not there before but there are some gaps

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I mean if 79% are eligible for or help under the ACA 21% are not and that could certainly be millions of people you know while Medicaid generally has no or minimal premiums and cost-sharing that's not true of ACA marketplace plans mark mentioned silver plans you know they can care even for low-income people pretty substantial premiums that may feel unaffordable as well as deductibles even after cost-sharing reductions and I

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think there's a there's a real lack of awareness and understanding many people who are losing their jobs now I've never had to rely on Medicaid or for the ACA marketplace and may not even know or understand their options and the Trump administration has reduced outreach by by 90 percent they've reduced a grants to community-based navigator enrollment assisters by eighty four percent so the application process which can be complex could be really hard to navigate for for

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people you know if and I think Hemi Hemi talked about this while ACA marketplace subsidies are funded federally and the federal government covers the vast majority of the cost of Medicaid expansion enrollees ninety percent that's not true of appearance or children who were eligible for Medicaid before the ACA so there there will be substantial state costs as as there is greater in enrollment in Medicaid and I

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would say I mean I agree with mark that that I don't think we're in for a revolution in employer-based insurance in this period either economically or politically about what I think we could see is a solidification of the ACA as part of our health insurance system as more people rely on it there's actually a question in the Q&A box from one of the audience members about whether or not the pandemic will change the discussion or politics around Medicaid expansion in the states that haven't expanded

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and any chance that Congress will boost federal funding for expansion to a hundred percent for remaining states so Hemi I don't know if maybe that's a question for you are we seeing any revisiting of expanding Medicaid and the states that have not done so yet or at least conversations about doing so unfortunately no and they're actually you we've seen some action where they're going in a different direction so Oklahoma for example had a proposal in to expand its Medicaid program which

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they are now withdrawing Kansas was another state that had been that their governor governor Kelly had been really interested I think she's still interested in expanding Medicaid but unfortunately with the budget pressures they're facing and the anticipation of the increase in the rolls we are not hearing and so that's just at nga we are not hearing from our state leaders about real interest or momentum towards Medicaid expansion do you think that

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would change if Congress came to the table with you know something that looks like a hundred percent funding again of Medicaid which is how the Medicaid expansion at least was initially funded I don't know if that will change enough I mean even with the six percent though Congress provided a six percent increase in the Yaak map and they required a maintance of effort so in order for states to qualify for that and so right now you know states are not able to do if they have big budget cuts the only

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thing they're really able to do is cut provider rates and that's going to continue on and B of course they're advocating for the 12% increase because anything more is needed but I think there's a real concern that they're they're not able to they're not going to be able to cover their current budgets so I even think with a hundred percent you know going from 90 to 100 that's not going to be enough to address the kind of bigger shortfalls that they're worried about because you know just just to remember you know states have to balance their budget and the two biggest drivers of state spending are Medicaid

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and education generally speaking so those are the two areas they go to first to figure out how to kind of balance when they when they don't have the state revenue they need to define the budget fully marker to come back to a topic that came up I think in in Larry's initial comments about what's going on with the finances of health insurance companies today so you know spending for health care has fallen off a cliff as the health care system has almost overnight been been

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turned off and in fact even as its reopened I think there's a lot of concerns about whether patients feel comfortable Riaan gauging with the health care system I know my I opened my mail this week and I had a rebate check for my car insurance company because everybody stopped driving over the last three months now it wasn't as much as I thought maybe it should be but nonetheless there was a rebate you know what's going on with the bottom lines for health insurance companies we have

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you know kind of two dimensions of customers I guess we think about we have the you know the covered individuals themselves who are obviously using a lot less health care and had contributed premiums whether directly or indirectly and then we have the providers who are used to getting paid from those premiums and really struggling financially and in some cases at the risk of closure the what's the what do we know about the current state of the bottom line of health insurance companies and how

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they're thinking both in the current premium year but also next year first of all what seems be the case right what some experts in California claimed is that health insurance premiums are not going to take a big jump mostly because as you mentioned the claims actually went down rather than up usually when we teach this we tell students insurance is a great thing for covering independent events I get a heart attack you don't you pay your you

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pay to help me out effectively that's how insurance works there pandemic if it was literally a pandemic that wouldn't be possible because we'd all be sick but what happened was that people either held off they held off mostly I guess I'm not sure they were necessarily paying although to some extent of course by staying you didn't jump in your car you didn't have an automobile accident either but there was a pooling of across different

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kinds of diseases where high costs for treating bovid related disease were offset by little costs for other diseases so so in some ways it's not as bad as it could have been let's look for a bright line a bright lining in the cloud the of course is what's crucial is what will happen going forward but my guess is that that that the biggest challenge for insurers is as always they don't know what's going to happen any

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better than the rest of us and usually I mean it's I don't want to be insulting but it's these to me it's a great life to be an actuary because most the time you can just think on autopilot but that's not what's going on now and so insurers are gonna have to make some tough calls if they're thinking of what premiums are going to charge next year without anybody knowing what's going to happen next year there is one thing though that I think it's important for people to keep in mind as you mentioned we most of most Americans get their insurance as private insurance through

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their job and among those most of them have what's called self-insured plans so that's my plan at Penn it managed by blue cross but it blue cross is not the company that's out of money or that's coining money if claims have fallen it's the University of Pennsylvania's financial system I'm not sure where the money exactly piles up but when the adjustments are made at the end of the year for how much did blue cross administer to lay out on behalf of and

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employees and my plan there will be good news for Penn and if so the question is the question to which I have no answer is well then what are employers going to do their premium for one thing they these self-insured pruners are going to jump around for another thing they there is no good mechanism or even any mechanism for adjusting response to changes in self-insured

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whether it's plus or minus other than by changing next year what you might have to pay as your explicit payment which course is only about a quarter of the total cost or I guess giving us all a bonus right a wage bonus because the university didn't have they sent me a statement last month about how much they paid toward all of these fringe benefits if this fringe benefit is cheaper I'm expecting a check form Amy Gutmann - from president Gutmann as a refund on my

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on the employee pence contribution toward my health insurance but the punch line I guess here is this is a source of enormous confusion and if so then the fallback position is it's hard to predict but it's certainly much more complicated than you could have possibly imagined Rube Goldberg has never died when it comes to health injure there's a question which is an interesting one about you know I think a lot of how

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we're thinking about what will happen to employer sponsored insurance is maybe not quite happened yet these are a lot of a lot of projections about where we might be heading and so that's basically the question is have we seen the losses yet and if not why not what's kind of holding the system together I mean I think that that's right and we projected and you mentioned some other projections from from urban Urban Institute and others as well that there could be tens of millions of people losing jobs to insurance we estimated 27 million but I

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think it's pretty clear that has not happened yet you know the job losses were so fast and so big and employers just really didn't know what this recovery was going to look like and how quickly it was going to come you know whether it was going to be a v-shaped recovery and a really sharp V so in employers wanted to keep in many cases keep a relationship with these these workers so that they could reopen and recover quickly so in some cases the government is helping pay pay

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salaries and benefits for workers through the protection protection program in many places either employers have laid their workers off or furloughed them and they're getting unemployment compensation the employers are still providing their health benefits it's it's all anecdotal there's no systematic data but I think it's it's it's pretty widespread that employers are continuing benefits and that was true in May it was true in June I think this month if if employers are not calling workers back

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we're going to start to see those those benefits disappear and I think as we get in further into the summer if unemployment remains high we will see big big decreases in job based insurance we just make one comment on that one of the safety valve for the employment based system is the requirement for COBRA continuation which says if you no longer get insurance as part as an employee you can continue for up to 18 months to continue to get insurance but you have to pay for it and most people

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get a sticker shock because they think they may know what they're explicitly paying for me it's about $4,000 a month but but they for family coverage but they don't know the 20 the 80 percenters so the employers paying so that's the sticker shock and for a lot of them it's it's quite you know not only did you lose your job but also now you're going to have to pay $15,000 for $20,000 for your family coverage instead of $4,000

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for your family coverage what a hit a potential solution of course is that you should be on unemployment unemployment the unemployment could be arranged like your salary is arranged in which some portion of what would have been your unemployment payment is taken out and used to pay toward your health insurance towards your Cobra continuation so you can continue to retain that and kind of keep it up and you avoid the sticker shock because you never saw the money in

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the first place so there may be some attempts I think there have been some discussions of other government might help with Cobra continue and there is a balanced budget model of that I guess what I'm saying if you fix the total about to be paid as compensation to unemployed people by diverting some of that at the beginning toward their health insurance which of course everybody ought to have I mean it forecasters that we have people running around out there without healthy just

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wanted to follow up with really briefly on that point that the heroes Act does include a provision that would allow subsidies for Cobra for folks that needed to continue with that coverage so just wanted to put that out there of course you know we still don't know what's going to happen with the heroes Act in terms of conversations with the Senate and how they're going to move forward with a package that you know both sides of the aisle can agree on but did want to put that out there and to say that's something that we can be advocating for and then in the phase

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four package to address Kovan 19 and Scylla Hemi may be painted a not so optimistic view of you know Medicaid expansion I think you know a lot of you know things you've written about it is about the incredible importance that Medicaid plays in in addressing gaps in coverage you know what do you see as potential ways to try to push States forward to get the federal government to do more like what what is it going to

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take to get the rest of the states to the join Medicaid expansion that was envisioned as part of the ACA we do have a pretty grim picture in terms of the situation with Medicaid now you know states you know are having budgetary issues at the same time you have more Americans that are having to rely on on Medicaid for health care because they have lost their employer-sponsored health insurance and you know as Mark pointed out may not have the money to

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pay for Cobra for that continuation of coverage if it even is offered to them I mean most Americans don't even have $400 you know to you know cover an emergency if they're if they have one you know so in terms of the Medicaid conversation you know Medicaid is in the center of you know what we're advocating for in terms of you know how we can ensure that people do have coverage in

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this critical moment and some of the things that we've been advocating for to incentivize states to expand Medicaid and I think this may have been mentioned earlier was increasing the federal matching to 100 percent you know and then also we've been advocating for implementation of an automatic stabilizer that would ensure that the federal share of Medicaid costs would go up when state economies go down and so really trying to think through how to

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support states in this important moment because they are you know experiencing some budgetary challenges with more Americans having to rely on the Medicaid program for coverage yeah this seems to be a story that gets told over and over again that happens during recessions as states go into these emergency budget situations and start cutting which of course is at the very time that that need grows how many these this idea of an automatic stabilizer is that

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something that you think would bring some confidence to state policymakers to consider stepping forward in terms of mitigating risk about expansion I don't know I think there's so many concerns around just how they are going to keep their budget whole and not cut a lot of different programs I don't know if that's that's enough to be honest and it's not just the governor I mean there's also the state legislature I mean the states that are that haven't expanded in some states you have a

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democratic government that would be in favor of it and you have a Republican dominated legislature that is not and and those conversations were hard before Cove in nineteen and I think you know right now there's conversations around for example how is federal stimulus money going to be allocated and some governor's are waiting on their legislature to figure that out and legislators haven't been you know convening and so you know the politics still there and there's also serve an additional layer of the budget realities so so I don't know you know I never like

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to predict anything these days because it's Never Say Never but we certainly haven't been kind of hearing that I mean that the 500 billion that we're asking for is really to shore up state economies to make sure that they can you know get their people back to work and you know maintain a system that they currently have and that's that's really kind of the app that we're making one observation I just did want to share on the Medicaid enrollment numbers because I think it was in the chat too we have been perplexed about you know why why are we not seeing more people you know

42:51

coming onto the Medicaid rolls right now we thought there'd be more by now and it's increasing but it's slowly increasing we're actually just talking to some state officials about that and one is speculation around okay are there sort of more people that are able to access Cobra and you know things you know the the not the the big decline in the employer-based insurance that we experience obviously correlates to people signing up for Medicaid but there's also conversation around because people aren't going in for health care services is there just the slowdown of people want you know even thinking about

43:23

insurance you know everyone's kind of been you know locked down and you know in their own spaces and so they haven't really been focusing on this and as we start to reopen are we going to see sort of more movement in that direction get to the numbers that people have predicted originally they wanted to make that comment yeah I'm talking about well it is interesting in some sense as devastating as the lock downs were they were great forward for many people right stay home to the extent you can and now as some things are starting to reopen

43:54

people are starting to struggle with the idea of if they have the option of course many people don't have the option but if they do have the option of how to have a return to some sort of economic life the there's a comment in the QA or a question it really speaks to the relationship between health insurers whether they be public or private and the providers so this one is Ohio is cutting capitation payments to Medicaid managed care organizations based on reduced claims utilization

44:25

is that happening in other states is the claimed experience for medicare/medicaid similar to commercial and Medicare Advantage plans so I guess here is more on the contracting side between States and managed care plans are we seeing these kinds of things happen in the commercial market Medicare Advantage plans yeah and if I come on the Medicaid piece and then I would appreciate sort of Larry marks thoughts on commercial and medicare on the Medicaid piece we've been talking to a number of state officials about the Medicaid capitation

44:56

rate and the slowing down utilization and then what to do about that and a couple observations just from those conversations one is some of the plans are saying that the ululation is going to go up so do not adjust the cap rates now and there is kind of a conversation going on there on that front I think the second piece is some states are also thinking about kind of risk corridor type arrangements so that they can identify okay you know we'll do a reconciliation maybe at the end of the

45:27

year when we know better in terms of like what your risk actually was over the course of the year so I think there's different conversations going on to try to address that but i i'm curious about on the commercial and medicare side i haven't been tracking that yeah mark i guess your comment earlier had to do with like you know the actuary is really are needing to guess these days there are for the commercial side for medicare well i guess let me speak more generally about the fate of hospitals there's been a couple

45:57

of articles in The Times about them lately that have kind of irritated me a little bit one because they they don't seem to have a correct view of hospital financing so the way this should have worked ideally is okay so you've got all these people coming in at least in New York and Pennsylvania with coronavirus many of them are elderly so they're on Medicare what Medicare is supposed to pay cost the hospital so Hospital

46:30

shouldn't be losing money on them now Medicaid is supposedly doesn't pay cost they may lose money on but they should have been okay in terms of covering the resources for the coronavirus patients now of course because it was such a surge and demand it almost certainly true that they these patients cost a lot more than their DRG payment rate and so the Congress has thrown a lot of money at hospitals just

47:03

for no not talked too much in particular to try to patch that up but and that what what of course has been troubling to hospitals is well what about the people the physical therapists say who helped out people with knee transplants knee replacements we don't need them anymore but but we can't lay them off that fast there's all these fixed costs and who's going to help us out with that so to some extent the problem I think is inherent in the way hospitals are set up

47:35

that they have relatively high fixed costs and so when they experience these unexpected and enormous fluctuations in business they're in big trouble and of course that's then the other point of the Times article was of course not their point the reporter's point of my point is that's why the CEOs are paid the big bucks right those million-dollar compensation packages because they're supposed to know what to do in a situation like this rather than complain about how unfair the world is well maybe

48:08

not but but and as a matter of course the way it always works the big salaries are a drop in the bucket in terms of total revenues of these organizations but the punchline I think here is that the hospital system as a whole that operates on a volume-based revenue system is just not set up well to handle dramatic fluctuations in volume even if total volume stays the

48:39

same but it shifts a lot from one kind of patient to another and so when the dust clears we may want to go back and look at that and see if there's a way to build in more flexibility either in terms of payment structures by yours or in terms of hospital structures organizational structures that would allow them to be a lot more flexible in terms of adjusting to dramatic changes I mean interestingly you don't you don't hear these kinds of stories from other countries which rely more on global

49:10

budgeting for example for hospitals which are not sensitive to these changes in volume and my at least in a pandemic be a more stable source of financing yeah yeah you do in some countries like Switzerland which are more market-based but yeah if it's it's the trade-off if you make every tub stand on its own bottom and you don't guarantee the hospital revenue with the idea that that'll its owner buys it to perform well the other side of that sword is

49:41

when for reasons not the hospital's fault all the sky falls yeah if I could have chimed in I'm wondering if this is going to propel forward the idea of global budgeting you know it's it's happened in a few places my understanding is moving on the commercial side there's a more more of an interest in in those models on the Medicaid side there's certainly some interest and you know what will this look like will there be at least from a state perspective enough resources to try to pull something like that off I

50:13

think we're certainly getting questions about that you know how do we think about moving some more you know global budgeting away from fee-for-service in a time when we don't have a lot of internal resources necessarily but would like to make the leap so so you know I'm hopeful that there will be some momentum on that front kind of across all payers because I think that that's what's needed well there is you know one of the questions in the Q&A box was how all this will impact CMS bundled payment programs I think they're all raising the

50:43

bigger question which is like will this change maybe even on the provider side will this change the appetite for more global budgeting or thinking about being paid differently because right now if you're a provider who is in a you know capitated environment that was able to maintain some revenues during this this disruption you're probably in a better off spot or if you're in a play where there's global budgeting involved is our anyone want to comment on whether or not there seems to be any changing

51:14

discourse maybe in the provider community about whether or not going through this experience is altering how people are viewing what they've what's are wishing for from the payment system leading up to this crisis there was growing discussion about the role of prices in in driving healthcare spending and you know talk of Medicare for all as Mark mentioned and in Democratic primary or a public option that would use government regulation to to constrain

51:45

prices but both hospitals and physicians and also drug prices you know I think coming out of this crisis or maybe less political appetite to take on hospitals and drug companies around their prices you know if hospitals come out of this as saviors and drug companies also developing a vaccine or antiviral treatments it may be tough politics to go after those industries on the other hand if we see examples of price gouging

52:19

I think that could lead to some momentum political momentum for addressing prices and and I do think providers might have more appetite for a more stable reimbursement or financing system my suspicion is they won't have much appetite for one that that tries to restrain their revenues them you know interesting thing I think is doctors and nurses are going to come out of this as saviors and David is as a physician it's time you guys should strike now while

52:50

the iron is hot I'm not sure what if you would go for global budgeting or not at your hospital but at least in terms of the public opinion about who's who's done well and who deserves to be admired it's the frontline providers that for the auto unit situation to get some reward for their extraordinary service in this period though we'll we'll see if that translates into any Financial Action because you know

53:23

gratitude is one thing but money is something else especially if you're an insurer if you're a payer or even if you're an employer but even so it seems like there might be a possibility for some movement there I do think the problem with global budgeting in the u.s. is you have these multiple payers and they'd all have to get on board and then who's going to run the global budgeting well if it's the state you have the not too glorious history of state rate regulation for hospitals to

53:56

look back on at least I remember that and you know in principle it could work well but question is how well can it work in practice and whether if you were running a hospital your physician in hospital whether you have enough trust of the governmental system if the government is running it to think that that's really what you prefer versus taking your chances with the current rickety system yeah many rubber bands and band-aids there are on it to make it

54:28

run so we're getting close to the end of the hour and so I want to ask all of you a wrap-up question which is you know given what we've learned during the kovat pandemic what would be your top recommendation to strengthen public and private coverage through this kind of storm that we're anticipating on the horizon and then even stepping forward you know in in January they'll be a new Congress will be post election D who's

55:00

in the White House at the time what would be your top recommendation for the administration as we go into a new a new year so let's start with Larry you want to go first you know I would come back to some of what Jamila said and and I think what this pandemic and and economic crisis have taught us is we we we need to pay more attention to to people who are particularly vulnerable in our health care system in our employment system

55:31

and and in our healthcare system you know and this this this this dual dual crises of the pandemic and and the economic downturn have you have almost been perfectly designed to spotlight the the vulnerabilities so you know if you look at who is most vulnerable the severe illness from cope in nineteen its low-income people its people of color it's people with pre-existing conditions

56:02

and certainly those are many of the same people who are most vulnerable to losing their their health insurance as well so so so my recommendation which is not a policy recommendation is is to it to to focus in on the most vulnerable among us in any in any policy changes we consider jabo I know you can give us some recommendations that wasn't go to you I definitely echo everything Larry said and I can make a specific recommendation

56:36

tonight to follow up with some of those that I made earlier I think for me you know and I want to preface this by saying I've recognized that politically we need to make some shifts in terms of the composition of Congress as well as the White House in order to get this done but I think universal coverage and you know we all on this call today are fans of the Affordable Care Act and can attest to the major gains that we have

57:06

made under it I think that we can build upon the Affordable Care Act by doing something as simple as adding a public option that could get us closer to universal coverage I think that is a single most important thing that we can do to ensure health equity in this country mark do you have a top policy I have one serious and one not so serious but it's so crazy it might work so the serious one is bring back the individual mandate and bring it back with enough

57:39

teeth in it or funding behind it that when you require somebody to have insurance you from societal perspective guarantee that the resources are available so that that person can pay whatever your obliging them to pay and if they can't afford to pay much then you have to pay for them to be able to qualify for the individual and date so that I think could be the tail that wags a dog that makes us have at least a serious conversation we need about what

58:10

kind of subsidies to various people deserve I currently get an $8,000 tax break to help me as a Wharton full professor afford health insurance I don't need that $8,000 tax break although I'm not going to give it back and bless somebody everybody else in my income bracket gives it back but so there is even money there if you actually got into the tax system but the more fundamental thing is to establish the principle that Americans should be required to have health insurance and

58:41

then the political subsidies should be put in place that make it possible for them to do that that's the serious point the less series what I think still interesting point would be let's talk about dramatically increasing the wages of people who work in nursing homes home health care and other services like that those are primarily people of color who are in high risk about doubling or tripling their wages and Medicaid could

59:13

do that and the government could do it because it pays for many of them are the bulk of their services the advantage of that would be not only justice in terms of them having it decent wages for the great work that they do but also I have self-interest that when and if I am when I have to be cared for by somebody I'd rather they be paid really well so they wanted to it rather than doing it out of the goodness of their heart although thank God in my family people who've gotten good care have gotten it

59:45

from people who did it out of the goodness of their heart but as an economist I'm reluctant to rely entirely on our heartfelt goodness as a motivation and I wouldn't mind both from a justice point of and from a an incentive point of view of seeing those people who provide such a important service appropriately compensated for what you do right Thanks I mean you get the last word I think there's an opportunity you know don't let any crisis go to waste ready the

01:00:16

famous line of really thinking about how do we want to rethink our health care system and the social supports that are related to those systems on the areas you know like reaching communities of color readapting to older adults I mean we had want to wanted to do work on that before all of this happened you know we have a lot of people aging in this country and our systems are not designed to address that so so where are we able to transform and then also rule you know the rural hospitals that are out there

01:00:47

some of them in some states are on the brink of not you know continuing to operate really small margins how are we really thinking systematically and futuristically about those health care systems that we have in place that are not right now adapted for the populations that we have appropriately so so in addition to the coverage piece on the access and service piece you know how do we really change those and and do more to make them work our future population great well I want to thank

01:01:17

all four of you I mean I think that you know what's important to keep in mind in all of these discussions is that there's an extraordinary amount of economic suffering going on in the country right now and as Jamila mentioned there certainly many people who don't have the option of staying at home and are putting themselves at great risk in their occupations in order to maintain wages and hopefully maintain health insurance and so I think a lot of this conversation has been very helpful to think about what are some responses that

01:01:50

would be appropriate to come at the state level and the federal level and it's certainly evident during these times that the federal government needs to play a very profound role in addressing a lot of these needs and concerns so again I want to thank all four of you for spending this hour with us and thank everyone for tuning in oh I very much [Music]

Virtual Seminar: Health Insurance Coverage in the Aftermath of COVID-19

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