Our Health Insurance System Was Not Built for a Plague

A mural painted on a fence depicts President Donald Trump as the coronavirus.
Just a random mural in San Francisco. Josh Edelson/Getty Images

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In ways large and small, it has become painfully clear that our health insurance system was not built to deal with a crisis like the coronavirus.

The system’s biggest failings are almost too obvious to state. Almost. There’s our ghastly uninsured rate, for instance. When you’re trying to fend off a global pandemic, it’s ideal that everybody in the country has some sort of health coverage so that they can get tested and seek treatment rather than become a vector for transmission. Before this whole debacle began, there were 28 million Americans without any coverage. And even those who were insured risked racking up thousands of dollars in medical bills if they stumbled into the wrong emergency room for a test.

Last month, the president finally signed a bill designed to make all coronavirus testing free, even for those without insurance. Crucially, it covered not just the diagnostic test itself but also the cost of a visit to the doctor’s office or the ER, which is often billed as a separate item. However, there are still ways patients can get trapped into paying, such as if they accidentally go out of network or get additional tests to check for other illnesses like the flu. And if someone actually ends up hospitalized with COVID-19? That too could become expensive. While a number of major insurers, such Cigna, Humana, Aetna, and UnitedHealth, have promised to waive out-of-pocket costs for their customers, those decisions don’t apply to self-insured health plans, where companies directly pay their employees’ health care costs. These kinds of policies cover the majority of Americans with job-based coverage, and it will be up to each individual company to decide whether to eliminate cost sharing for their workforce.

To put it another way: Despite Congress’ best attempt at an intervention, Americans could still end up in mountains of debt because they were victims of a plague.

Making matters worse, millions of Americans are likely losing the job-based insurance they relied on now that the economy is going into a deep freeze and layoffs are mounting. We don’t know the exact number of people who have been kicked off their coverage, but the Economic Policy Institute estimates that 3.5 million faced a high risk of forfeiting it over the last two weeks. That number is only going to grow.

Getting new coverage, unfortunately, could require jumping through a number of hoops, especially if your income is too high to qualify for Medicaid (in some states, unemployment benefits alone could put you over the limit) and you aren’t rich enough to afford the premiums on COBRA (really, who is?). Part of this is due to pure pettiness on the part of the Trump administration, which has refused to reopen—the federal insurance exchange that 32 states rely on—for a special enrollment period. As a result, people who lost their jobs and insurance will have to submit extra paperwork to prove that they’re allowed to apply for Obamacare outside of the normal open enrollment period. As this is the first economic disaster that has led to mass layoffs since the exchanges started running in 2014, no one is really sure how long it will take to process those forms. Thankfully, most of the states that run their own marketplaces, including California and New York, have opened theirs back up, which should spare their residents a headache and reduce the bottleneck.

But that isn’t the only bureaucratic absurdity people will have to deal with. When Americans apply for Obamacare coverage, they are required to estimate their income for the coming year so that the government can calculate the insurance subsidies they are eligible for. If the number is vastly different from what they reported on their previous year’s tax return, they have to provide documentation explaining why. But most people who’ve just lost their jobs have no idea how much money they’ll earn for the coming year, because the economy has been shut down in order to fight a pathogen, and we have little to no idea when it will open back up. A lot of people are going to be blindly guessing; if they pick a wrong enough number, they’ll have to pay back some of their subsidies when they file taxes in 2021.

In the end, these hurdles are probably going to prevent some people from getting insurance, even though they need it. Paperwork has a way of tripping people up. During Thursday’s coronavirus press briefing, Vice President Mike Pence said that the White House is working on a plan to pay hospitals directly when they care for uninsured COVID-19 patients, apparently by purloining some money from the $100 billion medical supply fund Congress created. That does’t change the fact that newly uninsured Americans will still risk financial strain if they fall ill from anything other than coronavirus. It also means there will be less money left over to, you know, buy hospital supplies.

Our health insurance system is a rickety kludge, full of financial traps and bureaucratic headaches. Even in good times, it doesn’t function acceptably compared with what other rich countries enjoy. But with the coronavirus, its problems have become magnified, forcing Congress to play a game of catch-up that has failed to address the many holes. Many on the left have pointed out that a system like single payer would eliminate all of these troubles; people would have insurance, all the time, no matter what. But you don’t need “Medicare for All” to fix the issues we’re now grappling with. If Americans had truly affordable health insurance options that weren’t tied to their employers and always kept out-of-pocket costs low, it would be enough. But what do we have right now? Just like the coronavirus, it’s a public health nightmare.

For more on the impact of the coronavirus, listen to this week’s What Next: TBD.