It happened in an instant, like most accidents.
My brother David and his wife Beverly took up cycling several years ago. They joined a cycling club whose founder was a fit 65-year-old Italian. When he announced a cycling trip to his native Tuscany, David, Beverly and several other club members didn't hesitate.
On the fourth day, near the town of Lucca, a rider in front of Beverly swerved. Her front wheel touched the rider's rear wheel. Beverly went down, and as the rider on her wheel, David rode over her and went down himself.
David remembers a doctor leaning over him, then a ride in an ambulance to the emergency room. After X-rays and an exam, doctors determined he had broken his collarbone, among other scrapes and bruises. Attendants reverently removed his jersey – cycling is a spiritual experience for most Italians – and placed David in a stabilizing sling, then escorted him to the waiting room.
Beverly appeared on crutches. She had fractured her pelvis. On their way out, David somewhat hesitantly asked what they owed. “Niente” was the reply.
To review: Go on a dream cycling trip, have an accident, receive excellent care in a foreign language and walk away without paying a dime. How is this possible?
Turns out that Italy's national health care system is one of the most advanced and efficient in Europe. Italy's National Health Service automatically covers all citizens. It is funded by corporate and value-added tax revenue collected by the central government and distributed to regional governments, which are responsible for delivering care. Residents receive mostly free primary care, inpatient care, health screenings, maternity care, specialty care, home care, hospice care, preventive medicine and pharmaceuticals. Patients make copayments for specialty visits and procedures and some outpatient drugs.
This past spring, Italy became the world's hot spot for COVID-19, causing severe strains on its health care system. It has experienced nearly 250,000 cases and suffered more than 35,000 deaths. One thing did not change: No one lost their health care coverage.
It's a different picture in the United States. Most Americans receive health care coverage through their employers, a quirk that arose during wage controls imposed by the government during World War II. To attract workers, employers began offering non-cash benefits, such as health coverage provided primarily through private insurers.
Employer-based health care coverage has become so entrenched in the United States that multiple attempts to emulate successful health care systems in other nations have largely failed. Most recently, Congress approved the Affordable Care Act in 2010 – by one vote – after contentious negotiations the preceding year. It established the three-legged stool of guaranteed issue by insurance carriers, mandatory coverage required of individuals and large employers, and premium subsidies available through health care marketplaces in each state.
It also contained a major expansion of Medicaid, whose extra cost would largely be borne by the federal government. Since passage of the ACA, the percentage of uninsured has dropped from 17.8% in 2010 to 10.4% in 2018. While the ACA was the most ambitious federal legislation since Medicare in 1965, health care coverage largely has retained its employer-centric character funded by private insurance.
Consequently, since March, as unemployment has soared with the pandemic, millions of people have lost their employer-sponsored health insurance. When that happens, newly uninsured former employees have a few options. If the employer has 20 or more employees, COBRA continuation coverage is an option, but not one that is likely to be affordable. Employer premium cost-sharing stops if a former employee elects COBRA, so an employee whose employer paid two-thirds of the premium will find that health care premium costs will triple. That's not a helpful scenario for one who has just been laid off.
Former employees can explore coverage in the ACA marketplace. Varying levels of coverage are available, as are subsidies for those whose income is between 138% and 400% of the federal poverty level. But plans whose premiums are affordable may have high deductibles and copays, resulting in significant underinsurance when compared with former employer-sponsored coverage.
Medicaid is another possibility, though availability will depend on whether a state has expanded Medicaid under the ACA. Thirty-six states, including Indiana, have.
The Urban Institute, with funding from the Robert Wood Johnson Foundation, conducted a comprehensive study in May designed to predict how the COVID-19 recession could affect health insurance coverage for those who have lost employer-sponsored coverage. It used historic data to predict coverage outcomes at various levels of unemployment. In February, the national rate was a healthy 3.5%. By April, it had shot up to 14.7%. It came down in June to 11.1%, but recent spikes in COVID-19 threaten to cause unemployment to spike again.
The study predicted that with a 15% unemployment rate, 17,689,000 people (372,000 in Indiana) would lose employer-sponsored coverage. Of those, it predicted that 8,225,000 (169,000 in Indiana) would enroll in Medicaid, 4,348,000 (82,000 in Indiana) would enroll in marketplace or other private insurance. But 5,116,000 (121,000 in Indiana) would become uninsured.
The loss of coverage is especially severe in states that have not elected to participate in the ACA's Medicaid expansion. Texas is one of those states; it is seeing one of the highest spikes in coronavirus cases. The Urban Institute study predicts that 50% of workers who lose employer-sponsored health coverage in Texas due to the pandemic will become uninsured.
Few would argue that the health care system in the U.S. needs serious, comprehensive reform, even after the ACA. A profit-driven market-based system is fundamentally unsuited to health care. A well-functioning market assumes two parties with full knowledge and relatively equal bargaining power, but someone who's been seriously injured is in no position to choose between a $3,000 ambulance and a $36,000 Medevac helicopter. With opaque and arbitrary pricing, and an employer-based system, the market functions poorly, at least for the consumer, many of whom are one accident or illness away from bankruptcy. The just-resolved spat between Anthem and Parkview illustrates how the system does not operate for the benefit of consumers. Widespread unemployment caused by the pandemic has only magnified these flaws.
Italy's average life expectancy is 83.6 years; ours is 78.9. Italy spends 8.8% of its GDP on health care; we spend 16.9%. Clearly, Italy, and most other developed countries, have figured out how to deliver quality, cost-effective health care to their citizens.
We should, too.
Doug Powers is a partner in the Fort Wayne law firm of Beckman Lawson, LLP.