Dr. Chris Kapsner intubated his first COVID-19 patient — a 47-year-old man who arrived short of breath at an emergency room in Minnesota’s Twin Cities — back in April.
Now, seven months later, Kapsner, who lives across the border in Wisconsin, is weary and exhausted from the steady stream of patients arriving with a virus that is spreading across this part of the Midwest. Hospital beds and personal protective equipment are in short supply, and his colleagues are getting sick. “Even if we put up all the field tents in the world, we don’t have the staff for this,” he said.
Kapsner believes political disfunction at the state level and a “disastrous” federal response are responsible for Wisconsin’s spike in cases. It’s part of the reason he’s running for office.
Kapsner is one of at least four health care workers running for Democratic seats in the Wisconsin state assembly, and one of many in his field speaking out against President Donald Trump and the GOP’s response to COVID-19.
Wisconsin is in the throes of one of the country’s worst COVID outbreaks. On Oct. 27, the state reported more than 5,000 new cases and a test positivity rate of over 27%. Nearly 2,000 people have died, and only the Dakotas are currently reporting more cases per capita.
Despite this, Trump has been holding large rallies across the state where crowds gather by the thousands, often without masks. Another Trump rally was planned for Monday evening in Kenosha, the site of unrest last summer after Jacob Blake was shot in the back by police. Wisconsin is a crucial swing state in Tuesday’s election; Trump carried the state by just 27,000 votes in 2016 and is currently trailing Joe Biden in the polls.
Last month, a group of 20 doctors sent an open letter to Trump asking him to stop holding rallies in the state. Thursday, the night before Trump was scheduled to appear in Green Bay, hospitals released a joint statement urging locals to avoid large crowds. Earlier in October, the Trump campaign scuttled plans for a rally in La Crosse, in western Wisconsin, after the city’s mayor asked him not to come amid a spike in cases there.
Dr. Kristin Lyerly, an OB-GYN in Appleton, in eastern Wisconsin, said she struggles to find the right words to describe her anger over the rallies, which have been linked to subsequent coronavirus outbreaks. On Oct. 24, at a rally in Waukesha, about 100 miles south of Appleton, Trump falsely accused health care workers of inflating the number of COVID cases for financial gain.
“His lies are killing my neighbors,” she said.
Lyerly, who is also running for state assembly, said she spends her days trying to reassure terrified pregnant patients, while fearing she might contract the virus herself. She and her colleagues are overwhelmed. She keeps her PPE in her car to ensure she never goes without it. “We’ve completely forgotten about the human impact on our health care workers. Our health care workers are exhausted, they’re burned out and they feel entirely disrespected,” she said.
Lyerly said she decided to run for office in April, after the Republican-controlled assembly refused to postpone a statewide election, in which the Democratic presidential primary and a key state Supreme Court seat were on the ballot. The state GOP also stymied efforts to make it easier for Wisconsinites to vote by mail.
“As a physician, I think many of us were shocked that our legislature would put us in danger, and make us decide between our vote and our health,” she said. She’s running in a district that typically leans conservative but said her campaign’s latest polls put her within the margin of error of her opponent, an incumbent.
Dr. Robert Freedland, an ophthalmologist in southwestern Wisconsin and state lead for the Committee to Protect Medicare, signed the letter asking Trump to stop holding rallies in Wisconsin. He wanted to go on the record as having spoken out in the name of public health.
Freedland, who is 65 and has Type 2 diabetes, said he fears for his health when he goes to work.
Dr. Jeff Kushner, a cardiologist who also signed the letter, said he hasn’t been able to work since March because of the pandemic. Kushner, 65, has non-Hodgkins lymphoma and is on immunosuppressants. “If I got COVID, I wouldn’t survive,” he said.
Though he follows politics closely, Kushner said that he’s not “politically involved” and that he tends to keep his politics to himself and a close inner circle. But he said he doesn’t consider signing the letter to Trump a political act. “It’s a statement of what I believe about our society’s health and not a political statement,” he said. “It wasn’t an anti-Trump letter. We were just saying, ‘Please don’t have these superspreader events in our state.’”
Kapsner, the emergency room doctor, said he still speaks with patients and voters who doubt the severity of COVID-19. “My job isn’t to shame them,” he said. “There are many people out here who have had the good fortune of not being personally affected by COVID. Their friends or families haven’t had it yet. I fear their luck is going to run out.”
Data showed a lot of nursing home workers are working at more than one facility, and findings suggest that staffers who work in multiple nursing homes are one source of the spread of infections.
This article was published on Monday, November 2, 2020 in Kaiser Health News.
To make ends meet, Martha Tapia works 64 hours a week at two Orange County, California, nursing homes. She is one of thousands of certified nursing assistants who perform the intimate and physical work of bathing, dressing and feeding the nation’s fragile elderly.
“We do everything for them. Everything you do for yourself, you have to do for the residents,” Tapia said.
In March, when the coronavirus began racing through nursing homes, the federal government banned visitors. (That guidance has since been updated.) But even with the ban, infections kept spreading. A team of researchers from UCLA and Yale University decided to examine the people who continued to enter nursing homes during that time: the employees.
Keith Chen, a behavioral economist and UCLA professor, said the key question is this: “The people who, we can infer, work in this nursing home — what other nursing homes do they work at?”
Using location data from 30 million smartphones when the visitor ban was in place helped the scientists “see” the movements of people going into and out of nursing homes. The data showed a lot of nursing home workers are — like Tapia — working at more than one facility. Chen said the findings suggest that staffers who work in multiple nursing homes are one source of the spread of infections.
“When you learn that over 20 of your workers are also spending time in other nursing homes, that should be a real red flag,” Chen said.
The Toll on Patients and Beyond
More than 84,000 residents and staff members of nursing homes and other long-term care facilities have died of COVID-19 across the U.S., representing 40% of all coronavirus fatalities in the country, according to KFF’s most recent analysis. (KHN is an editorially independent program of KFF.)
In California, the analogous toll is more than 5,700 deaths, making up 35% of all coronavirus fatalities in the state.
The UCLA team created maps of movement and found that on average each nursing home is connected to seven others through staff movement. Limiting nursing home employees to one facility could mean fewer COVID-19 infections — but that would hurt the workforce of people who say they work multiple jobs because of low wages.
After each of her shifts, Tapia worries she’ll bring the coronavirus home to her granddaughter. She tries to take precautions, including buying N95 masks from nurses. She knows it’s not just patients who are at risk. Nursing home workers such as Tapia are also contracting COVID-19 — in California alone, 153 of them have died since the pandemic began.
At the nursing home where she works in the morning, Tapia gets an N95 mask that she must only use — and reuse — in that facility. At her other nursing home job, in the afternoons, she gets a blue surgical mask to wear.
“They say they cannot give us N95 [masks],” she said, because she works in the “general area” where residents haven’t tested positive for the coronavirus.
She doesn’t want to work at multiple nursing homes, but her rent in Orange County is $2,200 a month, and her low pay and limited hours at each nursing home make multiple jobs a necessity.
“I don’t want to get sick. But we need to work. We need to eat, we need to pay rent. That’s just how it is,” Tapia said.
Staff Connections Equal Infections
The UCLA study also found that some areas of the country have a much higher overlap in nursing home staffing than others.
“There are some facilities in Florida, in New Jersey, where they’re sharing upwards of 50 to 100 workers,” said UCLA associate professor Elisa Long, who, along with her colleagues, examined data during the federal visitor ban from March to May. “This is over an 11-week time period, but that’s a huge number of individuals that are moving between these facilities; all of these are potential sources of COVID transmission.”
They also found the more shared workers a nursing home has, the more COVID-19 infections among the residents.
“Not only does it matter how connected your nursing home is, but what really matters is how connected your connections are,” Long said.
The researchers say they’ve informally dubbed these highly connected nursing homes as each state’s “Kevin Bacon of nursing homes,” after the Six Degrees of Kevin Bacon parlor game.
“We found that if you’re going to see a nursing home outbreak anywhere, it’s likely to spread to the Kevin Bacon of nursing homes in each state,” Chen said.
The team hopes that local health departments could use similar cellphone data methods as an early warning system. Using the test results from the “Kevin Bacon of nursing homes” as an indicator would be the first step.
“As soon as you detect an outbreak in one nursing home, you can immediately prioritize those other nursing homes that you know are at increased risk,” Chen said.
Prioritize Masks and Hand-Washing
The California Association of Health Facilities represents most nursing homes in the Golden State. In response to the study, the group said its members can’t prevent workers such as Tapia from taking jobs elsewhere, and they can’t pay them more, because California doesn’t pay them enough through Medicaid reimbursements.
Mike Dark, an attorney with the California Advocates for Nursing Home Reform, doesn’t buy that argument. He said the state already tried paying nursing homes more in 2006 — and that made them more profitable but not more safe and efficient. He said he’s skeptical that extra funding to pay staff would reach those workers.
“We know from past experience that money tends to go into the pockets of the executives and administrators who run these places,” Dark said.
He agreed that health workers such as Tapia should be paid more but cautioned against one idea being floated in some policy circles: limiting workers to one nursing home.
“Then you can wind up depriving some of the crucial health caregivers that we have in these facilities of their livelihoods, which can’t be a good solution,” he said.
Instead, he said, regulators need to focus on the basics, especially in the 100 California nursing homes with ongoing outbreaks, since it’s been shown that infection control measures work.
“Right now there’s poor access to [personal protective equipment]. There’s still erratic compliance with things like hand-washing requirements,” he said. “If we spent more time addressing those key issues, there would be much less concern about spread between facilities.”
Jackie Fortiér is health reporter for KPCC and LAist.com. This story is part of a partnership that includes KPCC, NPR and Kaiser Health News.
Johnathon Talamantes, of South-Central Los Angeles, broke his hip in a car accident on Oct. 22 and underwent surgery five days later at a public hospital near downtown.
His post-op recovery will keep him in the hospital, L.A. County+USC Medical Center, beyond Election Day, and as he prepared himself for the surgery, he wondered what that would mean.
“One of the first things I asked my nurse this morning was, ‘Oh, how am I going to vote?’” Talamantes, 30, said from his hospital bed the day before the operation.
He initially thought of asking his mom to rummage through a pile of papers at the home he shares with her and bring him the mail-in ballot that he, like all registered California voters, received for this election.
But then staffers at LAC+USC told him about another option: They could help him get an emergency ballot and cast his vote without having to get out of bed. So Talamantes told his mom not to bother.
“I don’t want her coming down here, because of the COVID restrictions,” he said.
California law protects the rights of voters who are in the hospital or other care facilities, or confined at home. It allows them to get help from anyone they choose — other than an employer or a union representative — and to cast an emergency ballot.
In some states, only family members can assist hospitalized patients with voting from the hospital.
In California, New York and several other states, hospital employees and volunteers can help a patient complete an emergency ballot application. They can pick up the ballot for the patient and deliver the finished ballot back to the election office or deposit it in an official drop box.
In 18 states, the law allows local election boards to send representatives directly to patients’ bedsides, though six of those states have canceled that service this fall because of the COVID-19 pandemic, said Dr. Kelly Wong, founder of Patient Voting, a nonpartisan organization dedicated to increasing turnout among registered voters unexpectedly hospitalized around election time.
The group’s website features an interactive map of the United States with state-by-state information on voting while in the hospital. It also allows patients to check whether they are registered to vote.
Wong, an emergency room resident at Rhode Island Hospital in Providence, recalled that when she was a medical student working in an ER, patients who were about to be admitted to the hospital would tell her, “‘I can’t be admitted; I have let the dogs out, or I’m the sole caretaker of my grandmother.’” Then during the election of 2016, she heard, “‘I can’t stay. I have to go vote.’”
“That really caught my attention,” Wong said. She did research and learned patients could vote in the hospital using an emergency ballot — something none of her co-workers knew. “Our patients don’t know this, she said. “It should be our job to tell them.”
Some U.S. hospitals have been assisting patients with voting in major elections for two decades or more, part of a broader tendency in the health care industry toward civic engagement.
Community clinics register voters in their waiting rooms or at public registration drives. In an increasing number of ERs, patients and their families are offered the chance to register. Many hospitals, including LAC+USC, this year will have mobile voting units on-site, open to staff members, patients who are well enough to walk, and their families.
These efforts come against the backdrop of health care’s starring role in the nation’s heated political drama: COVID-19 has become a top presidential campaign issue, while the U.S. Supreme Court, its conservative majority fortified this week, prepares to hear a case — one week after the election — that could be the death knell for the Affordable Care Act.
The pandemic has made inpatient voting a challenge because of tight restrictions at hospitals and the many employees furloughed, laid off or working at home. And a significant increase in early voting and the use of mail-in ballots in many states may reduce the number of patients who need help.
“The majority of our patients, I am hoping, will have voted already, because that will alleviate the stress — for them, it’s one less thing to worry about,” said Camille Camello, associate director of volunteer services at the nearly 900-bed Cedars-Sinai Medical Center in Los Angeles, which has a program to help inpatients vote. In past elections, she said, over 200 patients have requested ballots.
At LAC+USC, administrators have been trying to ensure patients know they can get help voting. Posters line the walls of common spaces and staffers are handing out flyers with voting information to every patient who is admitted, said Gabriela Hernandez, the hospital’s director of volunteer services.
Hernandez said she and about 25 volunteers have been walking the halls in the inpatient units of the hospital for the past month, asking patients if they want help voting.
Patients who say yes get emergency ballot applications, which the hospital has been sending to the L.A. County Registrar-Recorder for verification. The ballot applications will continue to be made available to patients up to the morning of Election Day.
Hernandez and her team will collect the ballots and distribute them to patients, then return them to the registrar before the 8 p.m. deadline on Election Day.
Other hospitals have a more collapsed timeline.
At St. Jude Medical Center in Fullerton, California, hospital staffers will start asking patients Monday if they want voting assistance and bring them ballots on Election Day, said Gian Santos, manager of volunteer services at the hospital. In the 2016 election, only about seven or eight patients voted that way, Santos said.
St. Joseph Hospital in Orange, California, plans to do everything — applications and ballots — on Election Day.
For big hospitals, inpatient voting can be a massive undertaking. People often require assistance in multiple languages, and the hospitals frequently contract with translation services to accommodate them.
Many hospitals receive patients from numerous counties — and across state lines.
Lenox Hill Hospital in Manhattan plans to assist as many as 200 patients from nine counties in New York state and three in New Jersey, said Erin Smith, an obstetrical nurse navigator who, along with fellow OB nurse navigator Lisa Schavrien, is leading the effort.
The hospital will assign one or two “runners” to each of the 12 county election boards, Smith said. For her, enabling vulnerable patients to exercise their right to vote is worth the effort.
“If we’re not helping them do it, how many thousands of people are not voting in elections because they were in a car accident, because they had appendicitis, because they had unexpected brain surgery?” Smith asked.
“If we’re not making it happen in the hospital, it kind of feels to me like voter suppression.”
For deep blue California, where first-in-the-nation health care proposals regularly flood the Democratic agenda, there could not be more at stake in the presidential race.
If Republican President Donald Trump prevails, Democratic state lawmakers worry, they’ll be forced to scale back their ambitious plans and play defense the next four years, battling Republican attempts to curtail federal Medicaid spending and further unravel the Affordable Care Act.
Should Democratic presidential nominee Joe Biden win, California Democrats — who control all statewide elected offices and hold a supermajority in the legislature — are poised to go big on health care, pushing aggressively for a health care system that covers all Californians, regardless of their immigration status or ability to pay.
“This election will determine whether California has a willing federal partner who can move us forward in the ways we want to see health care expanded,” said Assembly member David Chiu (D-San Francisco).
“It is incredibly unlikely that another four years of Trump will allow us to make significant strides toward universal health care, whereas a Biden-Harris administration would allow us to make real progress toward not just health care for all, but so much more.”
California Dems Counting on Biden Win
Behind the scenes, Democrats in California are positioning for a White House led by Biden and vice presidential nominee Kamala Harris — which they presume would be more supportive of California’s agenda — and some are already planning legislation for next year. Not only are they plotting ways to crack down on hospital consolidation and end surprise emergency room bills, but they are also quietly discussing a trio of liberal initiatives that could again push California to the forefront of health care policy. They include:
A new single-payer health care bill that would nix private insurance and create a taxpayer-funded health care system for all Californians. “Just expanding the Affordable Care Act is not nearly enough. We need to be willing to stand up to the drivers of health care costs rather than give Americans an insurance card that they can’t afford to use,” said Assembly member Ash Kalra (D-San Jose), who is considering introducing the measure. A legislative analysis in 2017 estimated that single-payer could cost California $400 billion a year.
A wealth tax that could generate $7.5 billion a year to help finance potential coverage expansions. Assembly member Rob Bonta (D-Alameda) said wealthier people should pay more to help finance health care, education and other services, especially for Californians hit hard by the pandemic. “Some people have been offended and think that punishes the doers and innovators, but our intent is to help the most vulnerable,” he said.
Expanding its Medicaid program for low-income residents, called Medi-Cal, to more unauthorized immigrants. California currently offers full Medi-Cal benefits to all qualified residents, regardless of immigration status, up to age 26. “To see Latinos in this state testing positive at disproportionate rates of COVID-19, it makes it clear that people are dying and suffering from lack of health coverage,” said state Sen. Maria Elena Durazo (D-Los Angeles), who plans to spearhead the proposal.
Democratic Gov. Gavin Newsom has argued that the future of health care, and California’s ability to combat COVID-19, is at stake this election.
Although Newsom has sought to play nice with Trump — partly because California relies on federal cooperation and federal money to respond to COVID-19 — the first-term governor strongly backs Biden.
“We can quite literally go backward with an administration that actively wants to get rid of health care for tens of millions of people with preexisting conditions,” Newsom said in September. But Biden, he said, will allow California to “accelerate our health care reforms and have a real partner that can advance those reforms to lower costs and improve quality, as well as expand access.”
The governor’s health care agenda includes far-reaching measures to expand access to care and set government-imposed limits on health care spending, possibly penalizing hospitals and doctors for failing to meet cost reduction targets. Though Newsom withdrew his biggest proposals earlier this year, citing a projected $54 billion state budget deficit, Health and Human Services Secretary Dr. Mark Ghaly said the administration is considering reintroducing proposals that died this year, including a new Office of Health Care Affordability.
But these plans could be jettisoned no matter who wins the election, warned Rose Kapolczynski, a California-based Democratic strategist. The state’s pandemic-crippled economy is likely to lead to more budget cuts, making it difficult to adopt new, expensive programs, she said.
“Everyone is going to be fighting for money, and it’s going to be hard to pass big-ticket expensive items like single-payer if California faces massive layoffs of state workers and cuts to health care programs that already exist,” she said.
A Trump Win Could Spur Health Care Innovation
While Democrats fear a rollback of health care funding and benefits should Trump win, his reelection could offer greater opportunity for Medicaid innovation in states, said Lanhee Chen, former adviser to 2012 Republican presidential nominee Mitt Romney and research fellow at Stanford University’s right-leaning Hoover Institution.
“States can be laboratories of innovation,” Chen said at an October presidential election forum at the UCLA Fielding School of Public Health.
In what is known as the waiver process, states can ask the federal government for permission to use federal dollars to offer services or pursue new approaches to health care that go beyond what Medicaid and Obamacare traditionally allow.
If reelected, Trump could help both red and blue states by giving them greater “freedom and flexibility” to undertake new programs, Chen said. The Trump administration has begun to embrace such experiments, including in Minnesota, where it approved a bipartisan effort to establish a reinsurance program that compensates insurers for taking on certain high-cost patients.
In Georgia, Republican Gov. Brian Kemp received permission from the administration to impose work requirements for Medicaid enrollees and require some to pay monthly premiums.
This process “is a way of both satisfying a conservative desire to enhance private marketplaces as well as a progressive desire to expand coverage,” Chen said.
Mark Peterson, a professor of public policy, political science and law at UCLA, is skeptical, saying the process has favored Republicans under Trump.
“The Trump administration has been trying to use Medicaid waivers to go in a more conservative direction, doing things such as allowing Medicaid work requirements,” he said.
The Newsom administration is seeking permission from the Trump administration to dramatically transform Medi-Cal to focus more on preventing enrollees from getting sick, and to invest in getting homeless people into housing and treatment. A COVID-spurred budget crisis forced Newsom to pause the $3.5 billion Medi-Cal overhaul earlier this year.
Newsom is also relying on federal cooperation to respond to COVID-19. The federal government, for example, allows California hospitals in hard-hit communities to relax minimum nursing staff levels.
To go as far as California wants on health care, “we do need the support and cooperation of the federal government — there’s no doubt,” Ghaly said in an interview with California Healthline.
But state Sen. Richard Pan (D-Sacramento) dismissed the idea that the Trump administration’s idea of innovation would help California Democrats, who are pursuing health policies Trump has attacked. “We’ve been hamstrung,” said Pan, who chairs the Senate Health Committee. “Trump has been president for four years and we haven’t seen it.”
The Affordable Care Act
One major issue doesn’t hinge on the presidential election but could nonetheless cast major doubt on Democrats’ big health care plans: the fate of the Affordable Care Act.
The U.S. Supreme Court will hear a case on Nov. 10 brought by Republican states, and backed by the Trump administration, that could invalidate Obamacare. California is leading the defense, and the state “stands to lose much of the historic gains it made,” said Melanie Fontes Rainer, a health care adviser to Attorney General Xavier Becerra.
Should the law be struck down, nearly 5 million Californians could lose health coverage, health insurance premiums could rise, and the state would likely have to make dramatic cuts to health and social safety net programs. Last year alone, the state received $25 billion to help fund its Affordable Care Act programs, according to Ben Johnson, a health care analyst at the nonpartisan Legislative Analyst’s Office.
California has also gone well beyond the requirements of Obamacare. It has expanded Medi-Cal to more people; imposed its own requirement to have insurance or pay a tax penalty after Congress eliminated the federal tax penalty; and offers state-financed premium subsidies for low- and middle-income Californians.
Yet state leaders have not identified a backup plan if Obamacare is struck down, and as they plot a far more aggressive agenda, they fear they would be forced to backtrack and struggle to protect what California has already done.
“We’ll be crippled and our gains would collapse,” Pan said. “We’d have to retrench entirely.”
The penalties are the ninth annual round of the Hospital Readmissions Reduction Program created as part of the Affordable Care Act’s broader effort to improve quality and lower costs.
This article was published on Monday, November 2, 2020 in Kaiser Health News.
Nearly half the nation’s hospitals, many of which are still wrestling with the financial fallout of the unexpected coronavirus, will get lower payments for all Medicare patients because of their history of readmitting patients, federal records show.
The penalties are the ninth annual round of the Hospital Readmissions Reduction Program created as part of the Affordable Care Act’s broader effort to improve quality and lower costs. The latest penalties are calculated using each hospital case history between July 2016 and June 2019, so the flood of coronavirus patients that have swamped hospitals this year were not included.
The Centers for Medicare & Medicaid Services announced in September it may suspend the penalty program in the future if the chaos surrounding the pandemic, including the spring’s moratorium on elective surgeries, makes it too difficult to assess hospital performance.
For this year, the penalties remain in effect. Retroactive to the federal fiscal year that began Oct. 1, Medicare will lower a year’s worth of payments to 2,545 hospitals, the data show. The average reduction is 0.69%, with 613 hospitals receiving a penalty of 1% or more.
Out of 5,267 hospitals in the country, Congress has exempted 2,176 from the threat of penalties, either because they are critical access hospitals — defined as the only inpatient facility in an area — or hospitals that specialize in psychiatric patients, children, veterans, rehabilitation or long-term care. Of the 3,080 hospitals CMS evaluated, 83% received a penalty.
The number and severity of penalties were comparable to those of recent years, although the number of hospitals receiving the maximum penalty of 3% dropped from 56 to 39. Because the penalties are applied to new admission payments, the total dollar amount each hospital will lose will not be known until after the fiscal year ends on July 30.
“It’s unfortunate that hospitals will face readmission penalties in fiscal year 2021,” said Akin Demehin, director of policy at the American Hospital Association. “Given the financial strain that hospitals are under, every dollar counts, and the impact of any penalty is significant.”
The penalties are based on readmissions of Medicare patients who initially came to the hospital with diagnoses of congestive heart failure, heart attack, pneumonia, chronic obstructive pulmonary disease, hip or knee replacement or coronary artery bypass graft surgery. Medicare counts as a readmission any of those patients who ended up back in any hospital within 30 days of discharge, except for planned returns like a second phase of surgery.
A hospital will be penalized if its readmission rate is higher than expected given the national trends in any one of those categories.
The industry has disapproved of the program since its inception, complaining the measures aren’t precise and it unfairly punishes hospitals that treat low-income patients, who often don’t have the resources to ensure their recoveries are successful.
Michael Millenson, a health quality consultant who focuses on patient safety, said the penalties are a useful but imperfect mechanism to push hospitals to improve their care. The designers of the penalty system envisioned it as a way to neutralize the economic benefit hospitals get from readmitted patients under Medicare’s fee-for-service payment model, as they are otherwise paid for two stays instead of just one.
“Every industry complains the penalties are too harsh,” he said. “if you’re going to tell me we don’t need any economic incentives to do the right thing because we’re always doing the right thing — that’s not true.”
Many observers question the value, timing and legality of Trump's drug card plan, with the promise coming just ahead of an election in which the president wants to shore up the support of older voters.
This article was published on Friday, October 30, 2020 in Kaiser Health News.
If they’ve been listening to President Donald Trump, seniors may be expecting a $200 debit card in the mail any day now to help them pay for prescription drugs.
He promised as much this month, saying his administration soon will mail the drug cards to more than 35 million Medicare beneficiaries.
But the cards — if they are ever sent — would be of little help. Policy experts say that what Medicare beneficiaries really need, as well as younger Americans, are sweeping federal changes to close the gap between what their health insurance pays and what drugs cost them.
The nation’s 46.5 million enrollees in Medicare’s Part D prescription drug program — except for those who qualify for low-income subsidies — face unlimited out-of-pocket exposure to drug costs even though the Affordable Care Act finally closed the infamous “doughnut hole.” After Part D enrollees have spent $6,550 and reached the catastrophic threshold in a given year, they still must pay 5% coinsurance on the list price of their drugs.
Congress was considering legislation to lower drug prices and cap out-of-pocket costs until early this year, when the COVID-19 pandemic took center stage. But partisan disagreement, federal budget concerns and opposition from drug manufacturers and other health care industry groups hampered the efforts.
Many observers question the value, timing and legality of Trump’s drug card plan, with the promise coming just ahead of an election in which the president wants to shore up the support of older voters.
“A $200 card is better than a sharp stick in the eye, but it won’t be that meaningful,” said Tom Scully, the Medicare chief under President George W. Bush who in 2004 implemented a two-year, $1,200 drug card program passed by Congress as part of the law creating the Part D prescription drug benefit.
Two hundred dollars won’t go very far. One million Part D plan enrollees have out-of-pocket drug spending way above the program’s catastrophic coverage threshold, with average annual costs exceeding $3,200, according to KFF. (KHN is an editorially independent program of KFF.) Last year, Part D enrollees’ average out-of-pocket cost for 11 orally administered cancer drugs was $10,470, according to a 2019 JAMA study.
“A lot of people don’t have $2,000 or $3,000 to pay out-of-pocket when they go to the pharmacy,” said Stacie Dusetzina, a drug policy expert at Vanderbilt University.
Steven Hadfield, 68, of Charlotte, North Carolina, has a rare blood cancer requiring treatment with Imbruvica, with a list price of $132,000 a year. He also needs two different medications for Type 2 diabetes, including insulin at $300 a bottle, a blood pressure drug and a muscle relaxer to relieve leg cramps.
He continues to work at Walmart and holds three part-time jobs. He pays more than $4,000 a year for his drugs, out of his $12-an-hour wages and monthly $1,100 Social Security check. The only way he can afford Imbruvica is through the manufacturer’s copay cards.
If he left his Walmart health plan and signed up for Medicare Part D drug coverage, he would have to pay thousands of dollars more because, under Medicare rules, he would no longer be able to use copay cards. “My whole Social Security check would go to drugs, and I’d have nothing left for my car or anything,” he said
Asked about Trump’s $200 drug card, Hadfield said, “I’d be happy to get anything, but they need to do more. Our representatives need to create some kind of program to lower prices.”
The Republican-controlled Senate refused to consider a sweeping drug cost bill passed by House Democrats a year ago that would have capped Part D out-of-pocket costs at $2,000 a year, penalized drugmakers for raising prices above inflation rates and let Medicare negotiate drug prices. Trump threatened to veto it.
In addition, Senate Republican leaders wouldn’t take up a bipartisan bill backed by the White House capping Part D out-of-pocket costs at $3,100 and also imposing penalties for price hikes above inflation.
The lack of action hasn’t stopped Trump from claiming, mostly inaccurately, that he has implemented policies that have reduced drug prices and saved seniors lots of money.
“Day after day I’m fighting to defend seniors from Big Pharma,” Trump said Oct. 16 in a Florida speech promising drug price cuts of 50% to 80%. “We have this terrible system that’s taken years and years to rig.”
The president’s centerpiece proposal is to index the drug prices paid by Medicare to lower prices paid by foreign countries. But his administration has not yet issued a rule to carry that out, and any such rule would face a strong legal challenge from drugmakers.
Joe Biden’s drug cost platform includes allowing Medicare to negotiate prices with drug manufacturers, limiting launch prices for new drugs, capping price increases at the inflation rate and letting consumers buy cheaper medicines from other countries. His plan would also likely spark opposition from drug companies.
Trump’s $200 drug card appears to be in trouble within his own administration. White House chief of staff Mark Meadows said last week that details will be finalized shortly and that the cards will be mailed to seniors in November or December.
But the general counsel of the Department of Health and Human Services warned in an internal memo the plan could violate election law. Congressional Democrats have called for an investigation, saying Trump is “attempting to buy votes.”
In a draft document obtained by Politico, the White House set the cost of the drug card plan at nearly $8 billion. To avoid having to seek congressional approval for the expenditure, Trump’s advisers want to call it a demonstration project, testing whether lowering Medicare patients’ out-of-pocket drug costs boosts their compliance in taking medications.
It’s also unclear whether the Office of Management and Budget will approve the plan because Medicare demonstrations must be designed so they do not increase the federal budget deficit. Yet the money would have to come from the government’s general revenues or Medicare payroll taxes or premiums, likely causing a negative budget impact.
“It will be difficult to learn anything from this demonstration project that we do not already know from other studies,” Dusetzina said.
“It’s a whole lot of money that would be more effectively focused on people with cancer and serious chronic illnesses who are struggling with high out-of-pockets,” said Daniel Klein, CEO of the Patient Access Network Foundation, which provides grants to help patients with drug costs.
Maureen Allen, 80, a retired marketing specialist who lives in Talking Rock, Georgia, said she could apply the $200 card to her annual cost of more than $2,000 for the anti-blood clot drug Eliquis and other medicines.
“It would help me with one month of Eliquis,” she said. “We’ll take the card because we need the money. But don’t think for a moment it will have the slightest impact on my vote.”
By associating their Republican opponents with the out-of-control coronavirus pandemic and threats to the Affordable Care Act, they hope to convince voters the Democratic Party is the one that can better protect Americans' health.
In a tweet to his 78,000 followers Sunday, U.S. Rep. Harley Rouda, a Democrat from Orange County, California, described his Republican opponent Michelle Steel’s attendance at an indoor fundraiser without a mask as “sickening.”
Democratic U.S. Rep. Gil Cisneros also blasted his Republican opponent, Young Kim, on Twitter for attending the “superspreader fundraiser,” calling it a “slap in the face to frontline workers” and his constituents in southern Los Angeles County and northern Orange County.
After President Trump’s superspreader event in Orange County last week, @YoungKimCA decided to host her own. The superspreader fundraiser—a crowded, indoor event with no social distancing/no masks—goes against CDC guidelines. It’s a slap in the face to frontline workers & #CA39. pic.twitter.com/1z2wd5Ohj4
Earlier in the month, another Democrat, U.S. Rep. TJ Cox of Bakersfield, told a television debate audience that his GOP challenger, David Valadao, “is in lockstep with Donald Trump” and that Valadao aims to undo federal health protections.
These charges by incumbent lawmakers — who represent vast areas of California, from its inland farmlands to its coastal mansions and urban working-class neighborhoods — reflect a disciplined and widely used strategy Democratic congressional hopefuls are deploying across California and the nation: By associating their Republican opponents with the out-of-control coronavirus pandemic and threats to the Affordable Care Act, they hope to convince voters the Democratic Party is the one that can better protect Americans’ health.
In doing so, they are linking their challengers to President Donald Trump, who is deeply unpopular in the Golden State, with just 32% of likely voters approving of the way he is handling his job, according to a recent Public Policy Institute of California survey.
“Democrats have been able to tie the national conversation around the coronavirus pandemic with health care and with the economy and social unrest,” said David McCuan, a political science professor at California State University-Sonoma. “That allows Democrats to turn or hold individual districts.”
But the strategy isn’t a slam-dunk for Democrats, especially in the districts they flipped in 2018 — including seven in California. Despite the changing demographics in the once Republican strongholds of Orange County and the Central Valley, McCuan and other political analysts said Republican victories are possible if even a small number of residents who voted Democratic in 2018 swung back to the GOP.
Republicans have already taken back one of those seats. U.S. Rep. Mike Garcia (R-Santa Clarita) beat Christy Smith in a May special election — 55% to 45% — to fill the vacancy left after Katie Hill resigned from Congress amid allegations of inappropriate relationships with staff members. Voters in the district that includes Santa Clarita and Simi Valley will pick between the same two candidates in Tuesday’s election.
In these competitive districts, political analysts say the winner will come down to voter turnout and Trump’s approval ratings, which is now inextricably tied to his handling of the public health crisis. Nationwide, 26 congressional seats are ranked as toss-ups, according to the Cook Political Report, which tracks races.
“A lot of it’s about the president,” said Wesley Hussey, a political science professor at California State University-Sacramento. “And part of the component of the presidential election is health care, and that does trickle down to congressional races.”
Calls to the state Republican Party and the National Republican Congressional Committee were not returned. And none of the Republican challengers to the Democrats interviewed for this story responded to repeated interview requests.
In California’s southern Central Valley congressional district currently held by Cox, political analysts predict another nail-biter. Cox ousted Valadao from Congress in the last election by just 862 votes, in part by tying the three-term incumbent to Trump and criticizing Valadao’s votes to overturn the Affordable Care Act.
Now, Cox has added Trump’s handling of the pandemic as a reason for voters to reject Valadao again.
“He is in lockstep with Donald Trump,” Cox charged in a televised debate Oct. 20. “And I don’t know how you can stand behind a guy that’s saying, ‘Hey, we did a fantastic job and 200,000 Americans have died so far.’”
In the recent poll by the Public Policy Institute of California, California voters rated COVID-19 as the state’s top concern.
The tweets that Cisneros and Rouda penned Sunday, which included photos of their opponents at a fundraiser without masks, capitalize on that concern. Rouda, for example, reminded voters that his opponent, as the head of the Orange County Board of Supervisors, publicly questioned the local public health officer’s springtime recommendation that residents wear masks.
“Michelle Steel is Orange County’s top official and she violated public health orders to attend an indoor, maskless fundraiser just to receive a check,” Rouda told California Healthline on Monday. “The example she is setting shows that she lacks the leadership needed for her current position and the position she’s running for.”
Steel spokesperson Lance Trover accused Rouda of politicizing the pandemic, saying Steel has helped secure personal protective equipment for front-line workers, and food assistance and testing for the county’s most vulnerable residents.
Steel has publicly criticized Democratic Gov. Gavin Newsom for opening California’s economy too slowly, and her campaign has shared photos of Rouda socializing on a beach and in a restaurant without a mask. (Rouda said the only other people in the beach photo were close family members, and that the restaurant photo was taken before the pandemic.)
“Harley Rouda is a hypocrite who has spent the entire summer seeking to politicize the work of Orange County in battling the coronavirus,” Trover said.
While wearing a mask may resonate in California’s swing districts, there remain solidly red areas of California where defying a government mandate can score a candidate political points. U.S. Rep. Tom McClintock, a Republican who represents a sprawling conservative district spanning multiple northern and central counties, has called masks useless, balked at wearing one at a congressional hearing and asserted that state lockdowns have led to increased deaths.
So in addition to focusing on McClintock’s COVID response, his opponent, Brynne Kennedy, a first-time candidate and small-business owner, is targeting another health issue: his opposition to the ACA.
In her travels throughout the mostly rural district, Kennedy is highlighting his votes — 66 by her count — to weaken or overturn the Affordable Care Act.
“This is radically out of step with where our district is,” said Kennedy, whom political analysts describe as a long-shot candidate. “Talking about that to people, that’s very concerning to them, and it’s absolutely on the ballot this year.”
Kennedy’s focus on protecting the federal health care law, particularly preserving access to insurance for people with preexisting medical conditions, mirrors the messaging of her fellow Democrats.
And it’s putting a lot of Republicans on the defense, especially with Trump on the campaign trail advocating for the repeal of the Affordable Care Act, said GOP political consultant Rob Stutzman.
“Republicans are making a point of telling voters that they will support protecting preexisting conditions,” Stutzman said. “It’s clearly a vulnerability.”
U.S. Rep. Josh Harder (D-Modesto) has been talking about preexisting conditions since he first campaigned for his seat two years ago, referencing his brother’s health issues as a young child. He believes health care is once again the single-biggest issue in his race.
But Harder has recrafted his pitch from 2018, when he talked about backing “Medicare for All,” a position now seen as a vulnerability in swing districts where Republicans have labeled their opponents as liberal or socialist.
Now, Harder and other Democrats are talking about shoring up the ACA and creating a “public option” that would allow every American to enroll in a government-sponsored plan.
Harder said he is asking voters to reelect him to ensure Congress has the votes to protect the federal health care law if the Supreme Court invalidates it.
“We need to make sure that people understand that the stakes couldn’t be higher,” he said. “The only way that we get a legislative solution that prioritizes people with asthma, cancer and other preexisting conditions is if we elect Democrats to the House, to the Senate and the presidency.”
Democrats are favored to win both chambers of Congress after years of campaign-trail promises about healthcare. But with a pandemic, a more conservative Supreme Court and lingering disagreements between progressives and moderates, it could be difficult for Democrats to turn those promises into law.
In the final days of the campaign, COVID-19 and the threat posed to the Affordable Care Act and Roe v. Wade by the court's bolstered conservative majority are consuming congressional Democrats — right down to keeping them in Washington well after they would usually go home to campaign.
Even if they capture the Senate in this election, Democrats are not expected to win a decisive enough majority to pass bills without some support from the GOP. The Senate's filibuster rules could force Democrats to stick to legislation that can attract 60 votes — if they do not move to eliminate that requirement, as some are advocating.
Frederick Isasi, executive director of Families USA, a health consumer-focused organization that supported passage of the ACA more than a decade ago, said a slim margin could make it "exponentially more difficult" to pass major healthcare legislation.
Although progressives are pushing for more dramatic changes, Isasi said Democrats would have to consider, in particular, which measures their senators who won close races in more conservative states could support.
"There's going to be a lot of focus on making sure that they can support this because the vote will be so tight," he said.
Democrats argue that consumers' concerns about healthcare, which led them to secure a House majority two years ago, will drive them to White House and Senate victories this fall. It has been 10 years since Democrats controlled both chambers of Congress and the White House. One week before the election, the political modeling website FiveThirtyEight gave former Vice President Joe Biden and Democrats an 87-in-100 chance of winning the presidency; a 73-in-100 chance of winning the Senate; and a 96-in-100 chance of holding the House.
A recent poll from KFF shows voters preferred Biden's approach to healthcare over President Donald Trump's on every key issue, including handling the pandemic. (KHN is an editorially independent program of KFF.)
Democrats set high expectations early in the presidential campaign, with progressive candidates during the primaries arguing over sweeping proposals for government-funded insurance before Biden won the nomination. He championed a more incremental approach of giving consumers an option to purchase a public insurance plan, which would also be free for some based on need. That plan is now part of the party platform.
But the pandemic, and the Trump administration's decision to largely leave states to manage the health and economic repercussions, has changed the subject. On many popular issues like insuring more Americans and ending the practice of surprise medical billing, Democrats look no closer to agreement than they were months ago — even as the pandemic has made problems worse, with nearly 27 million people losing their employer-sponsored insurance in its first two months.
Sen. Patty Murray of Washington, expected to take over the Senate's health committee if Democrats win, called healthcare affordability "a top priority for Democrats."
"The bottom line for me is that everyone in this country should be able to get the healthcare they need without worrying about the cost — and I think this pandemic and economic crisis have underscored how important that is," Murray said in a statement.
But the disagreements that pitted Biden against progressives like Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) during the primaries remain, with the party's more liberal voices pushing for dramatic reforms to drive corporations out of the healthcare system. And in the halls of Congress, Democrats from traditionally "red" states may find fixing the ACA an easier sell than a government-funded public insurance option.
There is a lot of "ideological diversity" among Democrats, said Rodney Whitlock, a healthcare consultant who spent years working as a Republican Senate aide. Although Democrats like to refer to themselves as an inclusive, "big tent party," he said in a recent podcast that such diversity can make it harder to agree and get much done, even if the party is in the majority.
Observers warn the party's calculations could change if Democrats move to eliminate the Senate filibuster, removing one of the minority party's most effective means of opposition.
If Democrats win control of Congress and the White House, there would be "incredible support among Democrats" to eliminate the filibuster to achieve their goals, especially on healthcare, said Robert Blendon, a professor of health policy and public opinion at Harvard University who has a new article on the election in the New England Journal of Medicine.
Democrats will effectively have a year to advance their agenda before the next election, he said, and liberal voters, who make up about 50% of Democratic voters, are angry about how Republicans have managed power and eager to embrace universal health coverage.
Their argument boils down to this: "This is our chance in history, and we're not going to do it because we can't get three votes" in the Senate, Blendon said.
"Policies that currently would have no chance in the Senate could come into play in 2021 if the legislative filibuster is removed," Whitlock recently wrote. If that happens, he added, the healthcare industry would need to reevaluate proposals "that would have once seemed highly theoretical and unlikely."
Without the power to set the agenda or the numbers to pass their proposals, congressional Democrats have spent the Trump presidency telling Americans — in heartbreaking public testimony, impassioned floor speeches and reams of stalled legislation — that they are the party to trust with healthcare.
These days, Democrats are quick to mention the need to shore up the Affordable Care Act, which Republican attorneys general and the Trump administration are seeking to overturn through a case the Supreme Court will hear Nov. 10.
Though even conservative scholars say Republican arguments in the case are weak, Democrats worry the death of Justice Ruth Bader Ginsburg and the confirmation of Justice Amy Coney Barrett could endanger the law.
If the ACA is overturned, other legislative priorities likely would fall by the wayside as lawmakers address the potential elimination of coverage and consumer protections affecting millions of Americans.
While in the minority, Democrats have proposed numerous ideas to strengthen the ACA, leaving some measures on the table for Democratic leaders to revisit when in power.
In June, the Democratic-controlled House passed legislation aimed at increasing coverage and affordability, including by capping insurance costs at no more than 8.5% of income. The bill would grant Medicare the authority to negotiate drug prices — drawing from a proposal crafted by House Speaker Nancy Pelosi and House Democratic leaders in 2019 and included in Biden's platform.
That proposal initially ran afoul of progressives, though, who argued they had been cut out of writing the bill and that it was not aggressive enough.
Democrats also have failed to reach a consensus on banning surprise medical billing, which generally occurs when patients receive care unknowingly from a doctor or provider who is not in their insurance network. House Democrats disagreed earlier this year on proposals to solve the problem. A bipartisan proposal in the Senate also stalled, and efforts to ban surprise billing during COVID-19 proved ineffective.
In the meantime, as Democratic candidates talk up ideas like the public option to energize voters as voting draws to a close, Democratic leaders are making less specific promises.
"For the last four years, Donald Trump and Republicans have sabotaged the Affordable Care Act in the hopes of causing our healthcare system to collapse," Sen. Chuck Schumer of New York, the Democratic minority leader, said in a statement. "If we Democrats win back the White House and the majority in the Senate, we will strengthen and improve our healthcare system to make it cheaper and easier for everyday Americans to get the care and coverage they need."
Nursing homes, small physician offices and rural clinics are being left behind in the rush for N95 masks and other protective gear, exposing some of the country's most vulnerable populations and their caregivers to COVID-19 while larger, wealthier health care facilities build equipment stockpiles.
Take Rhonda Bergeron, who owns three health clinics in rural southern Louisiana. She said she's been desperate for personal protective equipment since her clinics became COVID testing sites. Her plight didn't impress national suppliers puzzled by her lack of buying history when she asked for 500 gowns. And one supply company allows her only one box of 200 gloves per 30 days for her three clinics. Right now, she doesn't have any large gloves on-site.
"So in the midst of the whole world shutting down, you can't get PPE to cover your own employees," she said. "They're refilling stuff to larger corporations when realistically we are truly the front line here."
More than eight months into the pandemic, health are leaders are again calling for a coordinated national strategy to distribute personal protective equipment to protect health care workers and their patients as a new wave of disease wells up across most of the country. The demand for such gear, especially in hot spots, can be more than 10 times the pre-pandemic levels. While supply chains have adjusted, and the availability of PPE has improved dramatically since the mayhem of the spring, limited factories and quantities of raw materials still constrain supply amid the ongoing high demand.
In this free-market scramble, larger hospitals and other providers are stockpiling what they can even while others struggle. Some facilities are scooping up supplies to prepare for a feared wave of COVID-19 hospitalizations; others are following new stockpiling laws and orders in states such as California, New York and Connecticut.
"They're putting additional strain on what's still a fragile hospital supply chain," said Soumi Saha, vice president of advocacy for Premier Inc., a group-purchasing organization that procures supplies for over 4,000 U.S. hospitals and health systems of various sizes. "We want available product to go to front-line health care workers and not go into a warehouse right now."
Over a quarter of nursing homes in the country reported a shortageof items such as N95 masks, gloves or gowns from Aug. 24 through Sept. 20. A recent survey from the American Medical Association found 36% of physician offices reported having a difficult time securing PPE. And about 90% of nonprofit Get Us PPE's recent requests for help with protective gear have come from non-hospital facilities, such as nursing homes, group homes and homeless shelters.
"I can completely understand that large health systems don't want to find themselves short on PPE," said Dr. Ali Raja, co-founder of Get Us PPE and executive vice chairman of emergency medicine at Massachusetts General Hospital. "Smaller places simply not only can't stockpile but also can't get enough for their day-to-day usage."
From the outset of the pandemic, the fight for PPE has been about who has had the most money and connections to fly supplies in from China, sweet-talk suppliers or hire people who could spend their time chasing down PPE. At various points, hospitals with sufficient supplies have shared their wealth, as has California, which sent millions of masks to Arizona, Nevada, Oregon and Alaska this summer.
But the fight for PPE is becoming even more challenging as states, such as California, pass stockpiling requirements, Saha said. Premier asked California Gov. Gavin Newsom to veto a bill that requires hospitals, starting in April, to have stockpiles of three months' worth of PPE, or face $25,000 fines. However, Newsom signed the bill into law in September, and Saha worries it could become model legislation for other states.
For an average hospital, a 90-day supply is $2 million worth of equipment filling about 14 truckloads, said Chaun Powell, Premier's group vice president of strategic supplier engagement — or about a football field and a half of warehouse space.
Traditional supply chains were ill equipped to handle the onslaught of demand caused by the pandemic, which has led to the frantic search for PPE. When distributors face such shortages, they rely on past orders to allocate who gets what share of their existing products, so no single buyer buys up everything. Nursing homes and clinics never used this much protective gear in the past, so they lack an ordering history and get put at the back of the line. That has forced many of them to rely on lower-grade masks like KN95s and other workarounds, Saha said.
In Kirksville, a college town in northern Missouri, Twin Pines Adult Care Center Administrator Jim Richardson said his nursing home is running low on gowns. It also is reusing N95s after staffers treat them with UV light. Although major medical supplier Medline Industries has supplied him with extra products at times, he's still had to turn to eBay.
"I'm a little-bitty facility and I'm bidding against a Life Care nationwide," he said. "Guess who Medline is going to take care of?"
COVID-19 cases are rising in Kirksville following the students' return to campus, Richardson said. Visitors are starting to return to the nursing home, and flu season is beginning.
Dr. Michael Wasserman, immediate past president of theCalifornia Association of Long Term Care Medicine, said the lack of supplies for smaller providers like nursing homes speaks to the nation's priorities when it comes to caring for older adults.
"Here we are in October, and the fact that there is not an abundance of PPE for every nursing home in the country is a literal abomination," he said. "Without PPE, you lose to this virus."
Stuart Almer, president and CEO of Gurwin Jewish Nursing & Rehabilitation Center, has managed to scavenge the 60-day stockpile required by New York state law for his facility on Long Island, but it's come at a great financial cost. And he worries that as long as hot spots and stockpiling persist, massive price fluctuations and delivery concerns will continue.
He learned early on no one was coming to save him. Even deliveries from the Federal Emergency Management Agency, which he appreciated, were too small in quantity and not always easy to use. The heavy floor-length gowns it provided needed to be trimmed.
"Really, we're on our own," he said.
American Medical Association President Dr. Susan Bailey said in an emailed statement that federal officials need to step in: "We urge the administration to pull every lever to ramp up PPE production — for N95 masks, gowns, and testing supplies — and coordinate distribution."
Get Us PPE's Raja argued for a more fair, robust, centralized and transparent allocation process that doesn't rely on donations to fill gaps. What good does it do a community to have a hospital stockpile, he asked, when the nursing home down the street has no PPE?
App-based driving services such as Uber, Lyft, DoorDash and Instacart are bankrolling California’s Proposition 22, which would keep their drivers classified as independent contractors, not employees.
Leading into the Nov. 3 election, the ballot measure — which has become the most expensive in state history — is mired in controversy and the subject of a lawsuit from Uber drivers alleging that the company inappropriately pressured them to vote for the initiative.
But what’s occasionally lost in the debate over Proposition 22 are the claims about what it will mean for app-based drivers.
Detractors, like unions and driver advocacy groups, say Proposition 22 would strip drivers of the protections of AB-5, a 2019 California law delayed by legal challenges. The law requires drivers to be classified as employees, which would afford them the associated benefits like paid sick leave, workers’ compensation and access to unemployment insurance.
Supporters, such as ride-sharing companies and the California Chamber of Commerce, say Proposition 22 would give drivers benefits, like a guarantee of minimum earnings and compensation when they are hurt on the job, while allowing them to maintain the flexible schedule of independent contractors.
In an online ad paid for by Lyft, the company says “Prop. 22 will give them … health care benefits.”
That sounds like drivers with Uber, Lyft and other app-based companies will automatically get health insurance if Proposition 22 passes. The truth is a little more complicated.
What Does ‘Health Care Benefits’ Mean?
We reached out to Lyft to back up its claim, and the company directed us to the “Yes on 22” campaign. This is how the campaign explained “health care benefits”:
Under Proposition 22, drivers who qualify — more on that in a minute — would get a stipend they could use to buy an insurance plan from Covered California, the state’s health insurance marketplace.
That stipend would be calculated like this: App-based companies would look at the statewide average monthly premium of bronze-level plans sold on the Covered California exchange.
The companies would then give qualified drivers a stipend of 82% of the average premium, said Geoff Vetter, a spokesperson for the Yes on 22 campaign. (On average, U.S. employers covered 82% of premiums costs for single coverage in 2019.)
So hypothetically, if bronze plans cost an average of $100 per month, Uber, Lyft or a similar company would provide qualifying drivers with $82 per month.
Drivers would be eligible for the full stipend — all $82 in the hypothetical case — if they average 25 hours per week of “engaged” time, which is time spent driving while there’s a passenger in the car. Time spent driving between passengers would not count.
“Most drivers work part time” and spend about one-third of their time waiting for rides and deliveries, according to the nonpartisan state Legislative Analyst’s Office. Using that equation, drivers would need to work an average of 37.5 hours per week for a single company in order to receive the full stipend.
A driver who averages at least 15 but less than 25 hours of engaged time each week would be eligible for 50% of the stipend — or $41 per month.
The stipend would be similar to employer-sponsored insurance because both employers and employees would contribute to the cost of insurance, Vetter said.
“For the people who do work closer to full time, it does give them that ability to receive health care coverage by getting a typical employer contribution for that coverage,” Vetter said.
Does a Stipend Equal Coverage?
But this stipend bears little resemblance to traditional employer-based insurance, which is what drivers would get if they were considered employees instead of gig workers, said Ken Jacobs, chair of the University of California-Berkeley Center for Labor Research and Education.
“It has very, very little relationship to what anyone would think of as job-based coverage,” Jacobs said. “It’s really wrong to think of this as health insurance.”
For instance, under Proposition 22, the stipends would be calculated and distributed quarterly, based on drivers’ hours. That could force drivers to periodically reassess what kind of coverage they would qualify for and could afford.
With traditional employer-sponsored insurance, a driver would enroll in a plan once per year and the premium wouldn’t change.
A vacation or illness could mean that drivers can’t maintain the hours required by the measure, costing them their stipend — and perhaps their insurance — for the quarter, and stripping them of the stability usually associated with job-based coverage, Jacobs said.
And getting money to buy an individual plan isn’t the same as participating in a large group plan offered by an employer, said Jen Flory, a policy advocate at the Western Center on Law & Poverty, a nonprofit organization that advocates for low-income Californians and opposes Proposition 22.
Covered California plans are typically less generous than the policies employees usually get through work, she said. And bronze-level plans, which have the lowest monthly premiums, also have the highest out-of-pocket costs for medical services.
Consider the deductible, which is how much a person needs to pay out-of-pocket before insurance starts paying for care.
In 2018, fewer than half of Californians who had work-based insurance had a deductible, and on average, that deductible was $1,402 for a single person, according to research from the California Health Care Foundation. (California Healthline is an editorially independent service of the California Health Care Foundation.)
The deductible on a Covered California bronze plan for an individual in 2021 will be $6,300 for medical services plus $500 for prescription drugs. Proposition 22 ties the stipend “to the highest deductible, highest out-of-pocket plans on the market,” Flory said. “And it’s for workers who aren’t making a whole lot of money.”
Drivers could use the stipend to buy a more generous plan, but the monthly premium would be higher and the stipend would cover less of it.
Depending on their incomes and other factors, drivers may also be eligible for tax credits and state and federal subsidies to help them afford plans on the individual market. But Flory said this amounts to the government subsidizing health insurance that employers should be paying for themselves.
It’s also problematic to base the stipends on a statewide average of bronze premiums because that doesn’t take into account the huge regional differences in the cost of care, said Gerald Kominski, a senior fellow at the UCLA Center for Health Policy Research.
“In the Bay Area, that contribution is going to buy a lot less than it would in Southern California,” Kominski said. “We’re a big state and have a lot of variation of health care costs.”
Our Ruling
The stipend offered under Proposition 22 is a “health care benefit,” but the wording is misleading and ignores critical information.
While neither Lyft nor the Yes on 22 campaign says the proposition will give drivers health insurance, saying that it will offer them “health care benefits” gives the impression that the stipend is similar to traditional job-based coverage. It’s not.
Drivers who value the ability to make their own schedules would have to figure out how to work an average of nearly 40 hours a week — essentially full time — to receive the full stipend. The stipend would cover a fraction of the premiums for health insurance that’s typically less generous than what they’d get as employees.
Moreover, because drivers’ stipends could change quarterly based on their driving time — which could be affected by vacation or illness — any coverage purchased with the stipend could carry a cloud of uncertainty.