Apr 30, 2020 - Health

Employers split from health care industry over coronavirus demands

Illustration of a doctor's hand and a business hand tearing a hundred dollar bill in half.

Illustration: Aïda Amer/Axios

Several large employer groups this week refused to sign on to funding requests they consider a "handout" for hospitals and insurers, according to three people close to the process.

The big picture: Coronavirus spending bills are sharpening tensions between the employers that fund a significant portion of the country's health care system and the hospitals, doctors and insurers that operate it.

Driving the news: The industry's most recent request — written primarily by the large hospital and health insurance lobbying groups — focused on a few items for the next coronavirus legislation.

  • Providing subsidies to maintain employer-sponsored insurance, which already receives a large tax break, as well as providing subsidies for COBRA for people who have lost their jobs. Some analysts predict 12 million to 35 million people will get thrown off their job-based coverage due to the pandemic.
  • Increasing subsidies for Affordable Care Act plans and creating a special ACA enrollment window.
  • Opposing the use of the industry's bailout funds to pay for uninsured COVID-19 patients at Medicare rates.

Between the lines: Employers know they get charged a lot more for health care services compared with public insurers, but many weren't keen about urging Congress to "set up a government program to pay commercial reimbursements," said an executive at a trade group that represents large corporations.

  • The demands "make perfect sense for hospitals who are trying to maximize their reimbursement and for insurance companies who are getting a cut when someone is in private insurance," said another employer group lobbyist. The sources asked not to be named to speak candidly.
  • Many employer groups still have a bad taste in their mouth after the industry torpedoed a fix to surprise medical bills last year.

The other side: Several health care groups that signed the letter dismissed the idea of any disagreement with employers.

  • "As far as I know, everyone is rowing in the same direction," said Chip Kahn, head of the Federation of American Hospitals, which lobbies on behalf of for-profit hospitals and is a prominent voice in the U.S. Chamber of Commerce.

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