December 18, 2019 | Updates

The Associated Press: One-Size-Fits-All Government Health Insurance Systems ‘Would Affect Thousands Of Jobs Nationwide’

WASHINGTON – New one-size-fits-all government health insurance systems – like Medicare for All, Medicare buy-in and the public option – “would affect thousands of jobs nationwide,” The Associated Press reports.

The Democrats’ health care plans vary widely in terms of the speed and scope with which they would affect health care industry jobs, but experts say every plan marks a substantial reconfiguring of one of the country’s biggest industry and thus all would affect thousands of jobs nationwide … Economists say the jobs impact of any shift away from private health care would be felt nationwide by hundreds of thousands of Americans.  It’s not just jobs at private insurance companies that could be affected; those working on processing insurance claims at hospitals and other administrative health care jobs could be reduced as well.  According to the Bureau of Labor Statistics, in 2018, nearly 386,000 Americans were employed by health and medical insurance carriers – but some analysts found the number of jobs lost from eliminating private insurance could be much higher.  Economists at the University of Michigan found in an analysis of Sanders’ Medicare for All bill that the jobs of nearly 747,000 health insurance industry workers, and an additional 1.06 million health insurance administrative staffers, would no longer be needed if Medicare for All became law.  In Iowa, however, the issue could be particularly problematic.

The devastating effect new government-controlled health insurance systems would have on Iowa jobs has left many voters in the early caucus state unsettled.  “Nearly 17,000 Iowans are either directly employed by health insurance companies or employed in related jobs,” The Associated Press reports

  • Kim Motl, Housing Advocate: “What about the little guys that work in the insurance business, that support our communities?  The secretary that works for them, but maybe supports their family, what happens to them? … What happens to all of those people who lose their jobs?”
  • Tamyra Harrison, Vice-Chair, East Polk Democrats, “says she has heard worries at her local Democratic meetings about ‘the effect it would have on people that work in the insurance industry, and those that have small businesses in the area.’  ‘They’re concerned about the repercussions on people living here that maybe the Democrats aren’t thinking of’ when they’re talking about eliminating private insurance, she said.”
  • Paula Dierenfield, Executive Director, Federation of Iowa Insurers: “This is an industry that employs thousands of employees in high-quality jobs … All of those employees pay income taxes, sales taxes, property taxes, and the companies that they work for also pay millions in premium taxes, as well as property taxes.  So it would have a significant impact on the Iowa economy generally as well as here in the Des Moines metro area.”
  • Marcia Wannamaker, Real Estate Agent: “It’s really going to cut our jobs … Then that trickles down to the housing.  They’re going to have to move.  I just think it’s going to be a disaster … When you sell real estate, these people buy homes.  It’s just part of how the Iowa – and especially in Des Moines, the economy works.”

Recently, one of the main architects of Medicare for All admitted to POLITICO that in order to pay for the costly new system, “the savings don’t come out of the sky … that means layoffs. there’s just no way around it.”

In the story, entitled “Medicare for All’s jobs problem,” POLITICO reports that according to the University of Massachusetts Political Economy Research Institute (PERI), “1.8 million health care jobs nationwide would no longer be needed if Medicare for All became law, upending health insurance companies and thousands of middle class workers whose jobs largely deal with them, including insurance brokers, medical billing workers and other administrative employees.” 

Meanwhile, studies and economists agree that Medicare for All would force American families to pay more.

Medicare for All “would cost more than $50 trillion over 10 years,” Yahoo! Finance reports.  And a recent study from the Urban Institute finds “that federal spending on health care would increase by roughly $34 trillion under a single-payer plan similar to Medicare for All,” CNN reports.  The Committee for a Responsible Federal Budget (CRFB) finds that “fully offsetting the cost would require higher taxes on the middle class,” and would “require the equivalent of tripling payroll taxes or more than doubling all other taxes.” 

  • The bill’s author, Senator Bernie Sanders (I-VT), acknowledged that Americans making more than $29,000 per year would “pay more in taxes” for Medicare for All.
  • “No matter how you cut the numbers, there is absolutely no way to pay for Medicare for all without tax increases – or spending cuts – on the middle class,” Marc Goldwein of CRFB told POLITICO.  “There’s no question it hits the middle class,” Kenneth Thorpe, Chairman of the Health Policy and Management Department, Emory University told The Washington Post.
  • “Although [Medicare for All’s supporters] have frequently stressed that the middle class would see overall costs go down, a wide range of experts … say it is impossible to make those guarantees based on the plans that the candidates have outlined so far … ‘It’s impossible to have an ‘everybody wins’ scenario here,’ said Kenneth Thorpe, chairman of the health policy department at Emory University … ‘There’s no question it hits the middle class,’ he added.  John Holahan, a health policy expert at the nonpartisan Urban Institute agreed: ‘Even though high-income people are going to pay a lot more, this has to hit the middle class.’… ‘Most of the proposals to move to Medicare-for-all would involve substantial tax increases that would affect most people,’ said Katherine Baicker, an economist at the University of Chicago who specializes in health policy.  ‘These are going to be big tax increases.’ … ‘I think it seems likely under most proposals taxes would have to go up substantially unless you dramatically cut the health care you’re getting,’ she added,” The Washington Post reports
  • And, “economists say that most taxpayers would pay more in taxes than they would save from having the federal government absorb the cost of health-care premiums,” The Post also reports.  Additionally, “71% of households with private insurance would wind up paying more than they would under the current system,” Kenneth Thorpe, chairman of the health policy and management department at Emory University, told The Wall Street Journal.

And the public option and other so-called ‘moderate’ incremental proposals would ultimately lead to the same consequences.

As The New York Times reported recently, the public option “could be plenty disruptive” and “tilt in the same direction” as Medicare for All.  This is backed up by the findings of a new study, conducted by FTI Consulting for the Partnership for America’s Health Care Future, which reveals the public option could eliminate consumer choice for millions of Americans and “eventually cause the elimination of all private plans in the individual market.”  The study finds:

  • After the first 10 years of the public option, more than seven million current enrollees would no longer have private coverage through the marketplaces – with two million of those enrollees being forced off their private plans as insurers exit the marketplaces altogether.
  • The study also warns that the public option could eventually cause the elimination of all private plans in the individual marketplaces, eliminating choice for millions of Americans, even those with the resources or subsidies available to cover their preferred plan.
  • In fact, the report finds that by 2050, 70 percent of state marketplaces (34 U.S. states) would no longer offer a single private insurance option.
  • Rural families would be especially hard hit by the public option, the study warns, and could find few if any options available to them.

As The New York Times also reported, the public option “could shake up the private market and also wind up erasing some current insurance arrangements … There’s also the possibility that linking public-option coverage to Medicare could cause some doctors to stop accepting Medicare patients, [Sherry Glied, the dean of the N.Y.U. Wagner Graduate School of Public Service, and a former health official in the Obama administration] said.  That would be another form of politically risky disruption.”Further, The Times explains, the public option “could have effects on employer insurance …[T]he existence of a public option might also induce some employers to abandon private coverage altogether … If it took a lot of market share from private insurers, some might decide to stop selling certain lines of coverage.  Private insurance could disappear from some places, or exist largely to fill certain niches, like high-deductible plans.”

Meanwhile, a study conducted by KNG Health Consulting, LLC for the Partnership reveals that “Medicare for America,” another proposed new government-controlled health insurance system, could force one-third of American workers off of their current employer-provided health care coverage, also known as employer-sponsored insurance (ESI).  And The Wall Street Journal reports that new government-controlled health insurance systems like the public option, Medicare buy-in and ‘Medicare for all who want it,’ represent “stepping stones to single payer.” 

An additional study, conducted by Navigant for the Partnership, finds that the public option could put more than 1,000 rural U.S. hospitals in 46 states “at high risk of closure.”  These hospitals serve more than 60 million Americans, and as Kaiser Health News and NPR reporthospital closures can have “profound social, emotional and medical consequences,” while RevCycleIntelligence also reports“[p]atient access to care suffers when a rural hospital closes its doors for good, and consequently, patient outcomes can deteriorate.”

  • study by KNG Consulting, which was supported by the American Hospital Association (AHA) and the Federation for American Hospitals (FAH), found that “[f]or hospitals, the introduction of a public plan that reimburses providers using Medicare rates would compound financial stresses they are already facing, potentially impacting access to care and provider quality.”
  • An earlier study by Navigant found that government-controlled health insurance systems such as “buy-in” or “public option” could force hospitals to limit the care they provide, produce significant “layoffs” and “potentially force the closure of essential hospitals.

An analysis released by the American Action Forum (AAF), finds that a new government-controlled health insurance system known as Medicare Buy-in would cost an additional $184 billion that American families can’t afford.  Even worse, the new system would decrease access to doctors and health care providers by nine percent and would lead to a four percent decrease in medical productivity.

Economists agree, that the public option would burden American families with unaffordable costs.  “The public option would cause premiums for private insurance to skyrocket,” economist Dr. Scott Atlas of Stanford University writes in The Wall Street Journal.  “A single-payer option is not a moderate, compromise proposal.  Its inevitable consequence is the death of affordable private insurance … Massive taxation would be needed to expand Medicare, whether optionally or not,” Atlas continues.

  • The public option “could also lead to a 10 percent increase in premiums for the remaining pool of insured people.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)
  • “[A] government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)
  • “[A] government plan that attracted people with expensive conditions could prove costly.” (Reed Abelson, “How A Medicare Buy-In Or Public Option Could Threaten Obamacare,” The New York Times, 7/29/19)
  • And a report found that an effort to implement the public option in Colorado, “could imperil thousands of jobs in the health-care industry or take hundreds of millions of dollars out of the state’s economy.” (Ed Sealover, “Colorado Public-Option Insurance Plan Could Cost Health-Care Jobs, Study Argues,” Denver Business Journal, 9/10/19)



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