Introduction

The U.S. economy is growing at a healthy clip, but working Americans continue to identify high prices and living costs as their chief economic worry in this crucial election year. According to a recent YouGov poll commissioned by PPI, soaring medical bills are a top financial concern for voters without college degrees. Asked specifically which health care costs hit them hardest, they say health insurance, hospitals and drugs.

According to a 2023 report from the Centers for Medicare & Medicaid Services (CMS), health care spending increased by 4.8% in 2022, outpacing the 3.2% rise in the Consumer Price Index (CPI), which measures inflation. This disparity underscores the worsening affordability crisis in health care, where the cost of medical services, including hospital visits, prescription drugs, and insurance premiums, is escalating more rapidly than general living costs. Consequently, households are feeling the pinch as a larger portion of their budgets is consumed by health care expenses, leaving less room for other essential needs.

Every dollar that is spent on out-of-pocket medical costs is a dollar less to pay for food, gas, and other household necessities. Three out of every four families report they are worried about being able to afford unexpected medical bills, which have left millions of households collectively shouldering more than $200 billion in medical debt. Anxiety about household expenses is especially acute in households making less than $40,000 annually, leading families to prioritize pressing financial needs over preventive or routine medical care.

Voters generally have greater trust in the Democratic Party than the Republican Party when it comes to managing high health care costs and ensuring access to abortion services. Surveys consistently indicate that a majority of voters trust Democrats more when it comes to reproductive health and reducing health care expenses.

During her debate with former President Donald Trump, Vice President Kamala Harris committed to capping insulin prices, limiting patient cost-sharing for generic drugs, and expanding Medicare’s authority to negotiate drug prices. She also vowed to protect and enhance the Affordable Care Act (ACA), promising to make permanent the Biden-Harris administration’s enhanced tax credits, which have lowered premiums by an average of $800 annually for millions of Americans.

Despite his repeated failures to convince Congress to repeal the ACA during his presidency, Trump in the debate vowed again to replace it with “something better.” When pressed for specifics, however, he could only reference a vague “concept of a plan,” nearly a decade after his initial promise to provide a viable alternative. Over that period, public support for the ACA has risen dramatically, from 38% to 62%, according to polling by KFF.6 Nonetheless, Congressional Republicans are still trying to weaken the law by pushing for the elimination of enhanced tax credits passed during the COVID-19 pandemic. This would mean higher premiums for working Americans with modest incomes.

Trump also is trying to distance himself from the public backlash against the Supreme Court’s decision striking down abortion rights. Since the Court overturned Roe v. Wade in June 2022, Republican-controlled states enacted laws that either ban abortion outright or impose strict restrictions on access to reproductive health care, affecting 25 million women. This shift has resulted in a patchwork of laws, with many states erecting significant barriers to abortion access. Consequently, millions of American women are at risk of not receiving timely reproductive health care.

Beyond restricting abortion access, the impact of the Roe decision has complicated life for women seeking maternal care services. Many hospitals in states with stringent abortion laws have closed their maternity wards or significantly reduced maternal health services in response to legal challenges from right-wing politicians and pressure groups. Tragically, this led to the death of Amber Thurman, a 28-year-old nursing assistant and mother of a six-year-old son who succumbed to an infection after medical providers delayed care for the effects of a medication abortion in a state with such a ban, according to an investigation by ProPublica.

Maternal mortality review committees, like the one in Georgia that examined this case, typically operate with a two-year delay in reviewing the cases they investigate. As a result, experts are only now beginning to assess deaths that occurred after the Supreme Court’s ruling. As this data is reviewed and released, more such stories are likely to emerge.

Having stacked the Supreme Court with antiabortion ideologues, Trump now offers the ludicrous defense that Americans — who strongly supported the national right to abortion established by Roe — were clamoring for states to decide whether abortion should be legal. He now claims to support exceptions to abortion bans for rape and incest, drawing fire from outraged Christian conservatives who’ve accused him of political opportunism. Trying to avoid another minefield, the former president has also declared himself a “leader in fertilization” and proposed mandating free access to in vitro fertilization (IVF). Congressional Republicans, however, have blocked the Right to IVF Act.

Harris has vowed to push for national legislation restoring Americans’ reproductive rights; assuring access to contraception; and safeguarding families’ rights to access IVF if they can’t have children on their own. She also promised to continue to advocate for access to FDA-approved abortion drugs and select judges who uphold reproductive freedom.

In addition, Harris’ proposals provide a promising foundation for lowering medical bills for working families. But Democrats should be thinking about a bolder, more comprehensive attack on the structural drivers of medical inflation, which makes the U.S. health care system by far the most expensive in the world. In this report, PPI offers a radically pragmatic slate of new ideas for assuring access to providers, driving down medical prices, and improving health care outcomes for working Americans.

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ABSTRACT

This paper assesses the health and economic benefits of the rapid development of COVID-19 vaccines. Using a simple framework of stylized facts, we find that the COVID-19 vaccines saved 2.9 million lives, avoided 12.5 million hospitalizations, and saved $500 billion in hospitalization costs. Importantly, these are conservative estimates, based on the assumption that successfully surviving COVID-19 infection offers protection against future severe outcomes similar to vaccination.

Using the same framework, we examine the consequences to individuals of choosing to receive or not receive new COVID-19 boosters, given the continued evolution of the virus. An illustrative calculation shows that the expected 5-year economic losses to an individual from choosing not to receive boosters rises from $654 at age 30 to more than $65,000 at age 75.

INTRODUCTION

From the moment COVID-19 was first identified, researchers were projecting the potential economic and human cost of an unchecked major pandemic and the corresponding economic and human benefits of an effective COVID-19 vaccine. Some of these projections were exceedingly influential in guiding private and public responses to the pandemic.

The development, testing, manufacturing, and administration of COVID-19 vaccines to almost 80% of the population over the age of 12 in the United States (fully vaccinated) has been a tremendous scientific and policy achievement. Globally, about 67% of the world population was fully vaccinated as of March 2023.

Unfortunately, hopes that a sufficiently vaccinated population could mostly avoid initial infections have turned out to be excessively optimistic. As of November 2022, 77.5% of the population was estimated to have been infected by COVID-19 at least once. In the 16- to 49- year-old age group, the percentage infected is closer to 85%.

In particular, the Omicron variant turned out to be extremely contagious in the U.S. and globally. As of April 2022, 60 to 80% of the European population was estimated to have been infected with COVID-19. More recent estimates are even higher. According to one model, an estimated 95% of the European population has been infected at least once as of December 2022. In Japan, the cumulative infection rate, measured by antibody tests, rose sharply from 28.6% in November 2022 to 42.3% in February 2023. In Japan, an estimated 80% of the population has been infected at least once. In Korea, the cumulative infection rate was 83%. Even the draconian measures applied by the Chinese government were unable to contain the wave of infections.

A related observation is that neither infection nor vaccination with the current generation of vaccines appears to offer long-lasting immunity against reinfections. Past a certain point, the spread of the virus through the population could not have been prevented by a more aggressive vaccination program or other policy interventions.

However, the exceedingly good news is that vaccination appears to provide durable protection against severe outcomes such as invasive ventilation and death. Obviously, that might change as new variants arise, but for now, that’s what current evidence shows.

Notably, prior infection also appears to provide durable protection against severe outcomes, even for those people who have not been vaccinated. This is no longer a “novel” pathogen attacking unprepared immune systems. Once again, this could change for a sufficiently different variant.

So now we can get a clearer picture of the benefits of COVID-19 vaccination. Vaccination provided a much lower risk path for achieving protection against severe outcomes. Without vaccines, many more people would have died or have been hospitalized.

This paper has both a backward-looking component and a forward-looking component. Based on the evidence, the backward-looking component constructs a set of stylized facts that allow us to understand the economic and health benefits of a rapid-development COVID-19 vaccine compared to reasonable counterfactuals (including no vaccine and more rapid roll-out of the vaccine at the beginning of 2021). These estimates include the mortality and hospitalization outcomes of the “worst case” counterfactual of no successful vaccine, along with the associated health-related costs.

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The Largest in Health Care Coverage Since the Start of the Affordable Care Act

 

INTRODUCTION

America’s health insurance system is undergoing a massive disruption in coverage, specifically for adults enrolled in Medicaid and for children enrolled in the Children’s Health Insurance Program (CHIP). On April 1, 2023, four months after the COVID-19 public health emergency declaration ended, states resumed their Medicaid and CHIP redetermination process, which had been suspended during the pandemic. Troubling data is emerging from the states about what is happening to the 93 million Americans — nearly one in four — who gained Medicaid or CHIP coverage during the health care emergency.

Medicaid and CHIP enrollment grew substantially throughout the emergency due to the combination of the pandemic recession, new “continuous coverage” requirements and money from the federal government, and belated decisions in Nebraska, Montana, and Oklahoma to expand Medicaid under the Affordable Care Act (ACA). As a result, an additional 20.2 million Americans gained health care coverage.

Spiking unemployment rates caused millions of Americans to lose their employer-sponsored health insurance along with their jobs. Unemployment peaked at 14.7% in April 2020. By May, an estimated 27 million workers and their dependents had lost their health plans. Not surprisingly, the biggest increases in uninsured people were seen in states that had declined to expand Medicaid under the ACA.

Hit hardest by loss of coverage were mostly men, people aged 27-50, Hispanics, and low-income families. In response, Congress passed the 2020 Families First Coronavirus Response Act (FFCRA), which expanded enrollment in state Medicaid and CHIP programs from 71 to 94 million. In addition, more Americans purchased private health plans in the ACA’s individual insurance Marketplace. As a result, during the emergency the U.S. uninsured rate actually dropped to a historic low of 8.6% in 2021.

Now that the continuous enrollment has ended, an estimated 17.4% of Medicaid and CHIP enrollees (15 million) are projected to lose coverage. Some experts have estimated that disenrollments could range from 8 to 24 million. The Department of Health and Human Services (HHS) predicts that nearly 7 million eligible people could lose coverage for “procedural” reasons. This refers to situations in which states have outdated contact information due to misunderstanding or confusion the enrollee has on the paperwork, or they did not complete the renewal packets within the deadline.

The Congressional Budget Office (CBO) estimates that 6.2 million Americans will lose coverage in the redetermination process and will fully become uninsured, and an estimated 5.3 million children are anticipated to lose their coverage as well. HHS estimates that a third of those who will be at risk for losing Medicaid coverage are Hispanic, and 15% are Black. Unfortunately, the current data coming out of most states does not include a breakout of demographic groups. CBO estimates that this will swell the ranks of the uninsured by over 10% by 2033.

As of November 1, 2023, at least 10,046,000 Medicaid enrollees have been disenrolled based on the data from 50 states and the District of Columbia. Because there are varying lags of when states report data, this is likely an undercount of the actual number of disenrollments. There is also substantial variation in the disenrollment rates among these reporting states as each state has different approaches to managing its redetermination process. “Most concerning among recently reported redetermination data is that 71% of people have been disenrolled due to procedural glitches. Examples include states that have outdated contact information, enrollees confused by the paperwork, or missing deadlines for completing renewal packets. Confusion abounds, as adults and children may or may not still be eligible for Medicaid and CHIP, may have other coverage options, or may remain eligible for Medicaid or CHIP but don’t know it.

Throughout the redetermination process, people will lose Medicaid coverage because their income has increased as the economy has recovered. Disenrollment rates will vary according to differences in how the states approach redetermination. Those who are no longer eligible for Medicaid may be able to find coverage through the ACA Marketplace. They’ll be eligible for premium tax credits if they don’t have employer-sponsored health insurance that is considered affordable, meaning the employee share of premiums doesn’t exceed 9.12% of income in 2023. HHS estimates that nearly 3 million people could get ACA plans, while 5 million people who are disenrolled from Medicaid will gain coverage through their employers. While it will be critically important for those who are deemed ineligible for Medicaid to gain coverage through the exchanges or their employer, copays and out-of-pocket costs may be higher than Medicaid, making those coverage alternatives less affordable for some. Additionally, a KFF analysis shows that very few adults and/or children who lose their Medicaid and CHIP coverage will seamlessly transition to the ACA’s individual insurance exchanges. The most recent coverage transition data shows that roughly two-thirds (65%) of those who were disenrolled from Medicaid in 2018 had a period of uninsurance in the year following disenrollment and only 26% enrolled in another source of coverage for the full year following disenrollment.

Notably, more than half of children in the U.S. receive health care coverage through CHIP or Medicaid. CHIP covers children whose family earns too high of an income to qualify for Medicaid but do not earn enough to afford private health insurance. Unfortunately, parents who are getting notified that they’ve lost their Medicaid coverage don’t always know that their child still qualifies, resulting in further confusion on coverage options. Parents then try to enroll their children in a Marketplace plan that doesn’t always have the correct benefits for children, when they should be receiving coverage through CHIP. Both Medicaid and CHIP benefits are better designed to meet the needs of children, provide more comprehensive benefits, and are more affordable than private plans. There are certain limits on costs for care in CHIP and CHIP has been shown to be a more affordable option than employer-sponsored and Marketplace coverage. It’s clear that moving from Medicaid and CHIP to other forms of coverage demonstrates how important it is for a strong, coordinated response from the federal and state governments to mitigate disenrollments, especially for those who are disenrolled due to procedural reasons.

This significant gain in health coverage for millions of Americans saved countless lives, reduced suffering, and highlighted the importance of sound policies to make coverage more affordable and accessible, while incorporating coverage for telehealth services and for COVID-19 testing and vaccination. This period of continuous coverage is likely the closest the U.S. has gotten to universal coverage, making a smooth transition out of the PHE and mitigating coverage losses throughout the Medicaid redetermination process that much more critical. Despite the loss of the emergency expansion of coverage and the anticipated ineligibility of those who had this access, it is crucial to ensure that those who are deemed ineligible for Medicaid and CHIP are able to find alternative coverage options.

Given the enormity of this challenge and the impact that it will have on millions of Americans, this redetermination process has been deemed the largest transition in health care coverage since the first open enrollment period of the Affordable Care Act (ACA). PPI believes that both state and federal lawmakers should focus on improving data collection and state utilization of available CMS waivers and flexibilities, maximizing coordination with various stakeholders, and continued intervention in states with high procedural termination rates.

This policy brief examines what actions have been taken at the federal level to mitigate coverage loss, the trends of current redetermination data, and policy changes that states and the federal government can embrace to ensure that millions of Americans don’t fully lose their access to health coverage as the country transitions out of continuous coverage.

Read the full report.