Trump's Surprise Plan for Coronavirus Coverage

Trump's Surprise Plan for Coronavirus Coverage

Printer-friendly version
Plus: How big will this year's deficit be?
Monday, April 6, 2020

White House Says Government Will Pay Hospitals for Coronavirus Care for Uninsured

The Trump administration sprung a couple of surprises last week: It said that it would not reopen the Obamacare exchanges for a special enrollment period that would allow more people to sign up for coverage in the midst of the coronavirus pandemic. Then, faced with mounting questions over coverage for those who were uninsured — or who might lose their employer-provided plans as job losses soar — the administration said late Friday that it will reimburse hospitals for the costs of treating uninsured patients suffering from Covid-19.

The administration’s plan: Speaking at the daily Coronavirus Task Force briefing, Health and Human Services Secretary Alex Azar said the payments would come out of the $100 billion allocated to hospitals as part of the $2 trillion coronavirus relief package. Hospitals will be paid at the Medicare rate for services provided to patients with Covid-19. In order to receive the funds, hospitals must agree not to bill patients or issue unexpected charges, Azar said.

‘Purely ideological’: Azar’s announcement came just a few days after Trump decided not to reopen the federally operated health care exchanges — which offer Obamacare plans in 32 states during the fall enrollment period — in response to the crisis caused by the pandemic. Politico reported late Friday that the decision came as a surprise to the health care industry, which supported reopening the exchanges.

The decision also surprised some members of Trump’s own administration and raised questions about playing politics in the middle of a terrifying pandemic. “It’s a bad decision opticswise,” one administration official told Politico. “It politicizes people’s access to health services during a serious national health emergency.” Another unnamed Republican questioned to logic behind the decision. “You have a perfectly good answer in front of you, and instead you’re going to make another one up,” the source close to the administration told Politico. “It’s purely ideological.”

Still, the administration portrayed the payment program as a superior option. “In many respects, it’s better for those uninsured individuals,” Azar said Friday. “What President Trump is doing here with this money is an unprecedented, disease-specific support of care for individuals to make sure that people get treatment.”

Big questions remain: Larry Levitt of the Kaiser Family Foundation said Monday that there is still a lot of uncertainty about the administration’s plan, which could leave some uninsured patients exposed to big charges. Doctors could issue their own bills, Levitt said, and anyone who receives treatments but tests negative for Covid-19 could be billed for the full cost of their care. “[T]he details of how it’s implemented will determine how protective it truly is,” Levitt said, adding that “it won’t be the same as comprehensive health insurance.”

Tweet of the Day

Matt McDonald of the Republican consulting firm Hamilton Place Strategies says that in response to the coronavirus, federal spending as a share of the economy will rise to levels not seen since World War II. (h/t Axios)

Another woeful milestone today: The U.S. death toll reached 10,000.

Send your feedback to Follow us on Twitter: @yuvalrosenberg, @mdrainey and @TheFiscalTimes. And please tell your friends they can sign up here for their own copy of this newsletter.

Coronavirus Response Will Add $4 Trillion to US Debt, Goldman Sachs Says

Economists at Goldman Sachs say additional fiscal measures to support an economy battered by the coronavirus pandemic are likely to be necessary, and they expect those next steps could add another $500 billion (2.4% of GDP) to this year’s deficit and up to $1.5 trillion (7% of GDP) over the next couple of years.

“We assume additional fiscal easing because the measures enacted to date, while substantial, are not yet equal to the lost income due to COVID-19 that we expect,” Goldman economist Alec Phillips wrote in a note to clients Monday.

While the next phase of congressional coronavirus relief is still in its early stages — and there are already signs that reaching consensus on that package may be difficult — Phillips suggests that Congress might need to provide more funding for small business loans, unemployment benefits and aid to state and local governments, with additional direct payments to individuals also possible. But, he suggests, those programs may not be as large as they were in the CARES Act signed into law late last month.

Phillips also throws come cold water on the possibility of a large infrastructure package, though he suggests a more modest program on the order of $50 billion to $100 billion might be included. “While it is true that there is bipartisan interest in infrastructure, the debate over the long-term program has been over how to finance it over the long-term and on this, the two political parties have not come much closer to an agreement,” he writes.

The deficit and debt effects: In all, Phillips projects, the various phases of coronavirus relief will raise the deficit to about $3.6 trillion (nearly 18% of GDP) this year and $2.4 trillion (11% of GDP) next year — a total increase of about $4 trillion over the two years.

As a result, debt held by the public will rise from 79% of GDP last year to 99% by the end of this year and 108% by 2023, topping the previous high reached in 1946.


Views and Analysis