The Trump
Administration have undermined the social safety net for most Americans with
precision and a breathtaking ruthlessness over the past three years. Now you
lose your job, then your healthcare and shortly thereafter, your credit rating
which impacts your ability to get a job, obtain housing, or medical treatment.
This negatively reinforcing loop doesn’t have to be that way and it isn’t
in other industrialized countries. Most
Americans can’t make it more than a few months or even a few weeks on their
disposable incomes. And our children, many of whom watched their parents grind
it out through the mortgage meltdown of 2008 will be witnessing an even greater
debacle. What does it mean for the survival of our nation if our young people
feel hopeless?
This table lists components of the social safety network in
a pre-Covid-19 pandemic state comparing the three-plus years under the Trump
Administration to the state of the nation he inherited from in 2016.
|
Criteria
|
Trump Actions
Since 2017
|
Impact on
Individuals
|
|
Access to healthcare requires a nondiscriminatory environment, a
national effort, and funding-All of which were provided under the Affordable
Care Act known as Obamacare AND are also part of Medicare
|
Funding for the Affordable Care Act has been cut by reducing non-participation penalties and eliminating the 3% medical device tax; A Supreme
Court case is pending regarding the legality of the act because the penalty
for not having insurance was nullified in 2017. Republicans have stated their
goal is to gut Obamacare
|
Affordable Care Act provides subsidized medical insurance to 8.6
million households, down from 9.6 in 2016; due to Trump’s cuts in promotion
of the program and funding; Despite Trump actions more states have opted to
expand Medicaid access to the ACA standard, which is 133% of federal poverty rate
|
|
Uninsured population
|
In 2016 the US Census found 27.3 million had no insurance; no action
has been taken to provide affordable healthcare in the Trump Administration
|
In 2019, 30 million people were without insurance; health insurance gains
are reversing
|
|
Employment security
|
Unemployment rate in 2016 was 4.7%
|
Unemployment was 4.4% in January and as of the end of March 2020 was 13.1%
|
|
People in Poverty
|
40.6 million in poverty in 2016; Trump cut funding for school lunches
and made it harder for families to qualify; In 2016, 22.1 million children received
subsidized school lunches
|
38.1 million in poverty in 2019; 29.7 million children and youth
receive school lunch subsidies in 2020; school closures mean they don’t eat
|
|
Affordable housing
|
549,928 people were homeless in 2016
|
US Census for 2020 finds 3.5 million people are homeless
|
Looking at the trends from the corona virus Covid-19
pandemic this table shows the impact on social safety systems in the current
state, which is the Trump Administration under the Covid-19 siege.
|
Criteria
|
Current state
Trump Admin
|
Pandemic forecast
|
|
Access to healthcare
|
56% get health insurance through their employer; roughly 159 million
people
|
For those who can’t afford to pay their COBRA or private healthcare
premiums after job loss, this could result in another 47 million uninsured
people
|
|
Uninsured population
|
30 million
|
Estimated to rise to 40 million
|
|
Unemployment rate
|
15% as of April
|
Expected to reach 30%, the question is for how long and how many
businesses will go under
|
|
People living in poverty
|
38.1 million
|
This number will explode when unemployment benefits expire and there
are no jobs
|
|
People who are homeless
|
3.5 million
|
This number will skyrocket once the evictions start
|
Colossal
Job Loss
Large
businesses (airlines,Boeing) are currently being
offered federal subsidies to try and stave off job loss, thanks to the
Democrats who argued for these provisions in the federal lifeline. Initially Treasury
Secretary Mnunchin wanted to offer funds without strings or public transparency. Small businesses are only being offered loans which they must pay back and
their ability to do so is vague at best. Small businesses can’t go for months
without normal operations, let alone take on a new debt. Small businesses employ
more people than large corporations, so this could have a devasting impact on
employment throughout the country. Also, small businesses lack access to
affordable capital and typically invest their life savings to start their
enterprises. Small businesses finance themselves at much less attractive rates
than large corporations, who get a point-over-prime versus the small ones who
use their credit lines at 10% or worse yet, take on credit card debt at 25%
APR. Whereas, large companies rely on equity markets, meaning other people
invest in their organization, they do not risk their own capital. Corporate
executives don’t lose their homes, they may lose a bonus.
Impact on
the Self-Employed
There are at
least thirty million self-employed people in the US, which is a result of the
decades long corporate gutting of jobs, to be replaced by workers who have no
protections, no unemployment compensation, and no healthcare. (Microsoft started
this trend and ended up settling a Department of Labor action because of it).
Contract workers do increase profitability for companies, but at their own
peril. Democrats argued for inclusion of self-employed workers in the pandemic unemployment
compensation, which will help hourly wage earners, like Uber drivers, but won’t
help small business owners who draw 1099 self-employment compensation. If you
are a small business, like a C or LLC Corporation, nonpaying customers doesn’t
mean you, as owner are unemployed. I suppose if a business lost all of its
customers then the owner would be considered unemployed.
Irreparable
Financial Devastation for Many
Only 10% of
the iceberg is visible above the water line and there are pillars of the US financial
system which depend on stability and these are the pension funds and a huge swath
of private employer healthcare plans, which are self-insured.
Potential
Failure of State and City Pension Plans
Pensions
require financial solvency to pay their future obligations to retired workers
and if entire industries fail, this ability could be destroyed. The Pension Benefit
Guaranty Corporation, which is a US mandated watchdog for pension solvency, has
a limited amount of funds to cover bankrupt pensions and it would not be able
to withstand massive industry failure. In other words, pensioners may receive
reduced benefits or stop receiving them.
Solvency
of Self-Insured Medical Plans
For self-insured
health plans, which have been purchased by firms with as few as fifty
employees, the ability of those businesses to pay escalating medical claims
when they are experiencing severe business downturns is questionable. Self-insured
health and welfare plans are exempt from state regulation because of a 1976
federal law called ERISA, which means employees have no state protection agency
to help them with late paid or unpaid medical bills.
Down Stream
Impact
Any
significant impact on the healthcare safety net impairs services for a
community and Covid-19 is vividly illustrating the communities which were
prepared and those that were not. Since the US healthcare system is based on a
pay-for-service unrationed reimbursement methodology, all healthcare decisions
are determined based on who pays. In the early weeks of the Covid crisis
President Trump expressed concern about who pays for the testing, which delayed
testing for weeks, dramatically increasing the spread of the airborne disease.
In Korea, Australia, and Germany the question wasn’t who pays, because they
have national healthcare systems. Those nations coordinated national efforts to
arrest the disease quickly and as a result are not experiencing the job losses
of the US. Further, in other advanced industrialized nations it is unthinkable
for companies to be able to fire their workers to improve profitability. These
nations require private companies to pay into job retraining funds, severance,
and other social benefits to provide employment stability. The US has chosen to
have an unstable workplace because it benefits Wallstreet, not the workers. If
you look at real increases in household income, the increases are fractionally
higher than they were forty years ago. Inflation adjusted gains in household
income have decreased under the Trump Administration from a high of 5.2% of
2015 to 1.7% in 2017. Meanwhile the top 5% have experienced explosive income
growth. The CIA Factbook ranks the US 40th in income inequality
worldwide and at the bottom for industrialized nations.
It is easy
to see why Elizabeth Warren and Bernie Sanders have such a strong following
among reform minded voters, because nothing illustrates the inequities of the
US financial system and the tattered social safety net than the Covid-19
pandemic, which has been mismanaged by the Trump Administration from the start.
As King Louie said, “heads will roll,’’ hopefully with the 2020 election.
This article
was written by Roberta Winter, a healthcare analyst and freelance journalist
and author of Unraveling US Healthcare-A Personal Guide. https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972
