COBRA

COBRA

Why so expensive? It’s because US doctors prescribe more treatments, and those treatments cost much more than they do elsewhere. Most governments limit the price of treatments, freeriding on the US market to stimulate investment in medicine. American hospitals and drug companies have enormous leeway to raise prices — insurers have limited bargaining power, and uninsured patients even less.

 

Nor is all this money bringing any obvious reward. Compared with other rich countries, the US ranks at or near the bottom on life expectancy, infant mortality, adolescent pregnancy, sexually transmitted infections, drug-related mortality, obesity, diabetes, heart disease, lung disease and arthritis. No, the healthcare system can’t be blamed for all that — but it is hardly covering itself with glory.

 

-       US Healthcare is literally killing people – Financial Times

 

“When we look back, we will see this as a moment that laid bare some of the dysfunctions and inequalities in the American healthcare system,” says Adam Gaffney, an instructor of medicine at Harvard Medical School, and a pulmonary and critical care doctor. “We have a completely fragmented, privatized health system that continues to fail us.”

 

-       How coronavirus broke America’s Healthcare System – Financial Times

 

By JM Hamilton (5-17-2020)

 

One of the more revealing aspects of the 2008 financial crisis was how quickly Congress was corralled into bailing out the wealthy and the financial elite, under the TARP program, while America’s middle class & poor were quickly forgotten. Despite catastrophic national debt and no matter the year, the money is always there for another round of donor bailouts & welfare, while everybody else is expected to enjoy austerity & raw capitalism.

 

Since the pandemic’s beginning, the 2008 playbook is being utilized again, albeit w/ some minor assistance for labor.  Remember: Moral hazard, concerning state aid, per the establishment, only applies to the 99%... the elites would never get hooked on a free government assistance (all evidence notwithstanding). 

 

A quick recap: Faced w/ the coronavirus, the US Congress passed the CARES Act. The CARES Act, among other things, afforded $1200 to America’s working women & men (except for undocumented immigrants, who do most of the backbreaking labor), plus $600 in supplementary unemployment benefits through July.  Of equal importance, and for purposes of comparison, the CARES Act also authorized the Federal Reserve to create $4 trillion to bailout a debt-ridden Wall Street economy, the billionaire class, and debt markets.

 

And, as we were reminded again, last week, both the House and the Senate were too busy rearranging their stock portfolios -while the pandemic attacked the nation - to bother notifying the public.

 

Under the CARES Act, Congress attempted to offer assistance to labor, by providing small business w/ loans, so as to incent the maintenance of full payroll … but who was the House & Senate really helping?  Part of the US labor relief effort was to be administered through Small Business Administration (SBA) lending, under the CARES Act, which has proven singular by its complete ineptness in execution. 

 

Among the kaleidoscope of errors in administering PPP (or Paycheck Protection Program): large businesses, w/ access to public debt markets, availed themselves to millions, if not billions in the aggregate, for a program designed for small & medium sized business (many of these leviathans were connected to the Trump Admin); oversight of the SBA’s PPP program was an afterthought and Congress – despite protests after the fact - basically turned loose the Trump administration, SBA, Treasury, and Wall St. banks to administer the program (we can see how that turned out); the small business program is known for changing and fluctuating rules, particularly on the debt forgiveness, which was to occur as long as 75% of the loan went to worker payroll… it’s become such a problem that many businesses have begun returning their loans, which means employees lose out; and finally, a large number of these businesses – most unfortunately – will never see the light of day when the economy reopens.  They’ll end up closed or in bankruptcy.  

 

As with many US Federal programs – the key feature appears to be throwing money at the problem, rather than addressing structural defects w/in the US economy – the rank smell of fraud is in the air.  Rather than helping labor, as it was, allegedly, intended… PPP has turned into free-for-all financial buffet for the connected & wealthy.

 

 

 

 

 

 

 

 

As with 2008, and during the present crisis, the central idea is for a captured & controlled US Congress to do everything w/in its power to maintain the failed status quo.  Hence, the exceptionally nasty optics of trillions in welfare going to Wall Street, while ordinary Americans are not receiving enough to survive on (especially when we factor in the death dealing US healthcare system).  Then again, 40 to 50% of Americans were barely surviving before the pandemic. Many were working for less than a living wage and receiving government assistance. Now, imagine the financial wrinkle this virus has weighed upon their lives, during a time of catastrophic unemployment & another Great Depression. Imagine the one in five US children living in poverty? 

 

To come to the point: Even when Congress attempts to help America’s working women & men – many of whom serve on the front lines of this crisis – the end result often is little more than cover for bailing out ultra-wealthy special interests.

 

Consider House legislation passed last Friday… the so-called HEROES Act, which is DOA.  The cornerstone of the healthcare effort & assistance – passed by the House - is not aimed at American labor, but in propping up America’s patchwork of failed healthcare profiteering. 

 

In these United States, when a worker is terminated, they are offered something called COBRA, which allows the former employee to continue their employer’s miserable healthcare package, but, solely, at the employee’s expense. (If the employer doesn’t provide healthcare, or it’s a Gig job, there’s always the failed ACA or Medicaid.)  As the US healthcare system is largely employer driven, a layoff means most US workers will blow their severance pay, if they receive severance pay, on COBRA.  You know, so that an employee’s children and/or significant other can maintain healthcare coverage.  Food and rent becomes secondary, w/ healthcare becoming primary, particularly during a pandemic.  Any meager savings, an employee has accumulated, will likely quickly evaporate.  And this issue, COBRA, is huge considering record unemployment filings for the months of April and May, and particularly, w/ many white collar jobs now on the chopping block.

 

So with cascading layoffs, what does Congress do… they graciously agree to bailout the Healthcare insurance cartel w/ COBRA.  Basically saddling US workers – newly laid off, many not paid a living wage to begin with – with a dizzying array of deductibles, copays, and annual deductibles (please be sure and read the fine print).  

 

By the way, hats off to The Intercept for bringing another Insurance Industry welfare scam to light: COBRA.  

 

The bottom line: US healthcare is little more than an assembly line, where the profit making model is not based upon health or healthcare outcomes, but how much can the healthcare industry generate in fees, and resulting debt, with which to soak the already drowning American workforce.  Employees get laid off, and employers and employees can no longer afford medical insurance, due to the viral crisis and/or C-Suite mismanagement… zero worries, the US Congress is there to bailout US Health insurers with COBRA benefits, allegedly, or under the pretense of, helping labor.

 

See in Washington… even when America’s middle class and poor get assistance, or the lack thereof, America’s wealthy are the true bailout beneficiaries.  We’ve seen this w/ PPP under the CARES Act, and we may see it, again, w/ COBRA under the HEROES Act or some derivative legislation to come.  Americans also see it in backdoor subsidies to multinational income & profit statements, when corporations - reporting out billions in earnings - use state aid to backstop their labor force, who are not paid a living wage.  And on and on... 

 

Did Congress show any imagination or initiative… like agreeing to cover all Americans for their medical costs, during the pandemic, by bypassing the insurance cartel middlemen or pharmacy benefit managers altogether… absolutely not.  Imagination and initiative are beyond the House’s pay grade.  The Congress isn’t there to lead.  The Congress is there to take orders from wealthy insurance companies, trade associations, and lobbyist.

 

Meanwhile, the national debt spirals out of control, but not so high that Congress can't waste hundreds of billions on corporate/donor welfare. Per the Financial Times, even the AMA (hardly a disinterested party) says the US spends 760 billion in wasted dollars on the most expensive healthcare program the world has ever seen (w/ consistently worse healthcare outcomes among any other developed nation). My guess, if the AMA says we are wasting $760 billion, the number the United States is actually wasting is closer to $1.5 to $1.8 trillion dollars. 

 

How do I know?  Because most Western democracies spend half of what the US does on medical care, as a percent of GDP, again, w/ vastly better results. And those countries, and their citizens, see what’s happening in the US and they want no part of America’s healthcare model.  So if the US is spending 18% of GDP or $3.7 trillion on healthcare, then half that figure provides close to $1.8 trillion in savings. But if the US is to have any hope of achieving that savings, then America has to eliminate the middlemen, it has to step on the toes of special interests, and price gouging from Big Pharma must end.  In short, the Congress has to do its job.

 

But don’t look for this Congress, run by a corrupt political duopoly, to step up… the bailouts for the wealthy – and for the murderous enterprise that is for-profit US healthcare – will continue.  Americans will continue to enter bankruptcy, w/ healthcare bills being the primary reason.  And all you need to remember about COBRA, it’s just another component, or layer, of the failed for-profit US healthcare system designed to enrich a privileged few, and another means to subjugate American labor.

 

Copyright JM Hamilton Publishing 2020