Nearly 4 million Americans have been unemployed for 27 weeks or longer — trapped in a vicious cycle that makes it harder to get back to work.
The big picture: Long-term unemployment during a pandemic is a double whammy. Millions are experiencing food and housing insecurity and lack health care when they need it most.
What’s happening: “The troubling amount of long-term unemployment and its continuing rise is dangerous for the U.S. labor market,” says Nick Bunker, an economist at the jobs site Indeed. “A fast labor market recovery will help alleviate these concerns, but that bounce back is still a ways away and dependent on controlling the coronavirus.”
The number of Americans experiencing long-term unemployment — around 4 million — is far from the worst of the Great Recession, when long-term unemployment reached 7 million.
But it’s remarkable considering where the U.S. was before the pandemic. The long-term unemployment rate is 2.5%, which is comparable to the 3.5% overall unemployment rate in January 2020, Bunker notes.
Why it matters:Studies have shown that long-term unemployment hurts workers’ physical and mental health, reports Bloomberg. And the longer someone is unemployed, the harder it is for that person to get another job — let alone another job at the same pay level.
Job-seeking is even more exhausting during a pandemic, says Tim Classen, an economist at the Quinlan School of Business at Loyola University in Chicago.
To start, there are fewer jobs out there than there are unemployed people.
On top of that, people may be attempting to juggle job-hunting with parenting kids who are learning remotely.
Not everyone is comfortable interviewing over video calls, and not everyone has the broadband access required to even attend those interviews.
“The fluctuations in uncertainty play into this, too,” Classen says. Millions of restaurant workers, flight attendants, retail workers and more aren’t sure when the pandemic will end — or if their employers will even survive it.
There’s a bit of a silver lining, though.
While losing a job is a traumatic event and can really chip away at someone’s sense of self-worth, it can also be easier to bear if millions are going through the same thing. Job loss doesn’t feel as personal in a pandemic, says Classen.
“There’s a sense of, ‘Yeah, I’m depressed, and I’ve lost my job, but I’m not alone in my suffering,'” he says. “Maybe in some way that tempers it.”
A view of the JHMR slopes and the village at the base of the mountain in Jackson, Wyoming.
Tucked in the shadow of the Tetons, the town of Jackson, Wy., and surrounding Teton County is home to less than 25,000 fulltime residents, but annually hosts over 2.5 million visitors. The valley’s natural beauty attracts an influx of tourists, who in turn are responsible for roughly 30% of the region’s jobs and over $1 billion in annual revenue, but this year, visitors came with an unwelcome price tag for locals: “Every time in this pandemic that we’ve had an influx of visitation, whether that’s second homeowners, or people just coming for a weekend, it follows with an uptick in cases and hospitalizations” says Dr. Jeff Greenbaum, medical director at the Emergency Department for St. John’s hospital and the Jackson Hole Mountain Ski Resort (JHMR) ski patrol.
With just one major hospital and eight emergency room physicians serving Teton County, any increase in COVID-19 cases is cause for concern. And in January, following the Christmas and New Year’s tourism rush, COVID-19 cases in Teton County skyrocketed to some of their highest levels since the pandemic began. Despite these developments, the ski resort, hotels, bars and restaurants remain open in the town. And Greenbaum remains optimistic that with the right strategies and precautions, the small hospital will not be overwhelmed by cases and skiing can stay open during the season for both visitors and locals. “The nightmare scenario is if the patients are stacking up in the emergency room and we don’t have enough personnel to treat them,” says Greenbaum. “But we’ll see that coming in advance, and we are not there yet.” The local hospital still has over 50% of its ICU beds unoccupied and has no COVID-19 patient on a ventilator. JHMR is similarly optimistic that it can stay open the entire season, trusting in the protocols it has put in place to protect both guests and staff.
Teton is the wealthiest county in the U.S., with a per capita income of over $250,000. At the start of the pandemic, a flurry of private jets landed at the Jackson Hole Airport, sometimes with a private ventilator in tow, as second homeowners and new buyers escaped to this rural paradise. Greenbaum posits that part of the reason why St. John’s hasn’t been overrun by cases is that many of the tourists that get COVID-19 in Teton County might not stay to get treatment in Teton County. At a time when millions of Americans are out of work, when daily infection rates are at an all-time high, and when thousands across the country are dying daily from the virus, should the wealthy indulge in an après ski, looking out onto the beautiful Teton mountains, all while potentially shuttling COVID-19 into and out of Jackson?
“This place is pretty much a gigantic country club, relying on second homeowners and tourism for its revenue,” says Jesse Bryant, a doctoral candidate in American Sociology at Yale University and creator of Yonder Lies, a podcast exploring the history of Jackson Hole. “But Jackson has to balance the ultra-wealthy with the real reality of people eking out a living here.” Teton County has the largest income gap of any county in the U.S., with the top 1% making almost 150 times more than the other 99%. From mountain guides to house cleaners to bartenders, much of the employment in Jackson cannot easily be transitioned to remote work, meaning that Jackson’s working class are among the most susceptible to unemployment from the pandemic. All across America the costs of the pandemic are being born by the poorest members of society; a Pew Research Center survey from September found that about 50% of low-income Americans say they or someone in their household has lost employment or had take a pay cut due to the pandemic, and similarly about 50% of low-income Americans reported having trouble paying their bills since the pandemic started.
During the spring and summer, the Coronavirus Aid, Relief, and Economic Security Act passed by the federal government at the start of the pandemic had provided $600 in additional unemployment payment per week, assuring many local and seasonal workers that their livelihoods were safe even if their jobs weren’t. But almost a year into the pandemic, Jackson’s working class are left with far fewer options: federal unemployment relief dropped to $300 and state unemployment benefits in Wyoming, although extended by 13 weeks, dry up after 39 weeks. “Many of the workers here don’t have a six-month buffer saved up,” said one restaurant worker who wished to remain anonymous for risk of losing their job, “so, while tourism presents a risk, we’re willing to take it to keep our paychecks coming in.”
This is the predicament that America has put herself in: a country with a limited safety net during the pandemic forces her workers to choose between the risk of getting sick, or losing their livelihoods. The mountain and the town are left trying to find a balance between keeping the economy open for tourists, and keeping COVID-19 out. As the second largest employer in Teton County, JHMR takes center stage in this unfolding drama. The resort is responsible for the livelihood of around 2,000 seasonal and local workers, and if the mountain were to shut down, many of the ancillary services in the town, like hotels, restaurants, rental shops, clothing stores and other retailers, would likely shutter their doors as well. In 2017, when the resort had to close for five days because of a power outage, the net economic impact to the local economy topped $5.5 million. “What’s happening in Jackson isn’t just a story of wealthy people coming into the rural west and getting the locals sick,” says Bryant. “This place has become more like a symbiotic relationship.”
One particularly vulnerable population is the Latino community, a significant number of which is undocumented, that lives in Jackson, and in the neighboring towns of Victor and Driggs. While it’s difficult to get exact numbers of their contribution to the economy, these workers keep Jackson running by filling jobs in all sectors, from house cleaners and construction workers to cooks and waiters.
“I’ve lived in Jackson for 25 years and used to go back to Mexico every winter because it was just too cold,” says Jorge, an undocumented construction worker in the town. “But then I got used to the cold and began skiing every single day.” Asked whether opening up the resort is worth the risk of bringing more COVID-19 into Jackson, Jorge says that by and large the Latino community welcomes the tourism with open arms, because it means job security. This lines up with findings from a survey undertaken by the Yale School of Environment this past summer, showing that Latino residents in the rural West had some of the highest rates of COVID-related unemployment in the country. “My wife and I work hard, her as a house cleaner, me in construction,” said Jorge. “The resort opening up and tourists coming to town is how many of us make our living.”
For its part, JHMR has been doing nearly everything within its power to keep COVID-19 from spreading on its slopes, iterating as the situation evolves to try to keep the 2021 season operating. In March of 2020, as the first wave of the pandemic was sweeping across the globe, the Wyoming State Health Officer shut down JHMR for the remainder of the season. The resort reopened in May, first for hikers and then mountain bikers—the summer tourists that in total are only about 10% the size of the winter tourist population. Before reopening for the summer crowd, it tested every single one of its staff members for COVID-19, and the resort’s human resources department transitioned into a contact-tracing team, coordinating with town officials whenever a case arose. While Wyoming didn’t issue a statewide mask mandate until Dec. 7, the resort instituted a mandatory mask policy during the summer. JHMR also learned to be more flexible in its operations: staff are now trained to perform a number of different functions, so they can sub in if there’s a shortage in a department, and shifts function as separate pods, meaning that if a person in one group has been exposed to COVID-19, another totally isolated pod can come in to take its place.
Over the summer and fall, tourists came in droves to Jackson, with as many as 40,000 total visitors in a day. According to the Jackson Hole Chamber of Commerce, both Yellowstone and Grand Teton National Parks—both within a quick drive from of Jackson—had about 50% more visitors in October of 2020 than they did for the same month in 2019. While many of the outdoor activities that bring people to Teton County during the summer—hiking, biking, climbing—have been deemed relatively safe during the pandemic, tourists also flocked indoors to the bars, restaurants and stores that remained open throughout most of the summer and fall. As a result, Teton County experienced large COVID-19 spikes in July and again at the end of October and into November.
Unsurprisingly, workers got sick. In response, Teton County’s Health Officer, Travis Riddell, sent out a series of recommendations pressing citizens to not gather with groups outside of their immediate family, avoid crowded indoor spaces and not congregate at trail heads, parks or other outside spaces. Still, most businesses stayed open as patrons kept coming. Riddell noted that the town had little choice: “Economic disasters are public health disasters,” Riddell said in an interview in July 2020 to National Geographic. “We know that when there are economic downturns, where there is an increase in poverty, an increase in uninsured numbers—that has direct health effects.”
Once JHMR opened for skiing the weekend after Thanksgiving, it was clear that demand for outdoor recreation would carry into winter; even with almost no international travel, JHMR expects demand during the 2021 winter months to be comparable to past years, at least. “If we just opened up [completely], the mountain would be packed, because demand itself is through the roof,” says LaMotte, “but we’ve imposed a maximum daily capacity for the mountain, to keep guests and staff safe.”
On a bluebird day near Christmas, the resort was sold out. It had snowed almost 15 inches the day before, and cars inched into the packed parking lot. Skiers and snowboarders waited in line for the lot shuttle bus, which, despite operating at 25% capacity, still felt uncomfortably full. The restaurants and bars looking out onto the sunny mountain were similarly capped at 25% capacity, and while masks and social distancing were required, patrons waiting for tables escaped the cold by standing shoulder to shoulder in the foyer.
At the resort, the socially distanced lines for the gondola were dangerously compressing. A resort worker cheerfully reminded guests from every corner of the U.S. to keep their distance and their masks above their noses. “We’re going to make it all the way through the season, without closing” yelled the worker, to cheers from the crowds. The lines moved slow—normally eight people fit onto the gondola, but under the new policies there was no mixing between groups, so often times the gondola ascends with just one or two passengers. At the top of the mountain, with views of the valley floor against the backdrop of the jagged Tetons, everyone breathed a bit easier.
Rob Kingwill and Emilé Zynobia, professional snowboarders based out of Jackson, stepped off the gondola into the cold Wyoming air, about 4,000 feet above the valley floor. Both sported COVID-19 masks made by Kingwill’s apparel company, Avalon 7. “I feel like this is almost an essential service, to give people the opportunity to be outside, said Kingwill. “We need this for our mental health.” When JHMR shut down in March of 2020, Kingwill strapped his snowboard to his backpack and hiked up Teton Pass’s infamous 1,300-foot Glory Boot Pack—every day for 77 days until all the snow had melted. But, he points out, most recreational skiers don’t have the knowledge and skills to navigate such technical terrain—and without the money those tourists bring in, Jackson’s working class would suffer. “It seems like the benefits outweigh the costs of keeping the resort open,” agreed Zynobia, as she and Kingwill strapped onto their boards. “Even though this is an activity skewed towards to wealthier people, it is helping a remote economy, and it is getting people outside at a time when we feel caged in.”
By the middle of January, Teton County’s COVID-19 cases were skyrocketing.Teton County currently has the highest caseload per capita of any county in the state of Wyoming and the highly contagious U.K. variant of COVID-19 was found to be circulating in the area. While the state of Wyoming had loosened COVID-19 gathering restrictions, the county reissued a series of guidelines on Jan. 25 that kept indoor gatherings capped at 25% and limited outdoor gatherings to 250 guests. At the resort, group ski lessons have been replaced by private lessons (at no extra cost), and the gondolas and lifts are ascending the mountain with minimal group mixing. Still JHMR can only control what happens on the mountain; “My main concern is not skiing itself,” says Greenbaum. “But rather I’m concerned about peripheral activity to skiing that lead people indoors, whether it’s a bar, a restaurant, a hotel lobby, a rental shop, a bus.”
Across the nation cases are surging, and other Colorado mountain towns like Telluride and Crested Butte have had similar spikes, likely due to an influx of winter tourism. The infection ratein Pitkin County, Colo., home to the Aspen and Snowmass ski resorts, was skyrocketing in the middle of January, with an incidence rate of about 3,500 per 100,000 people. In response, the county’s health department shut down all indoor dinning operations, but left the ski resorts open. The results were promising: in the past two weeks the COVID-19 rates for Pitkin County dropped by over 50%. “We’re on pace to be below 700 [cases per 100,000 people] in early February and I don’t think any of us thought that would happen so quickly,” said Josh Vance, the county’s epidemiologist, in an interview with the Aspen Times. “I’ll be honest—I think not having indoor dining plays a role.”
In Teton County, restaurants and bars remain open for indoor operations long as they follow social distancing guidelines. The reliance on the ultra-rich creates an undeniable risk to the livelihood of Jackson residents and workers. In the early days of the pandemic, ski resorts across Europe became super spreaders, with visitors transporting the virus like carry-on luggage, threatening other tourists and locals alike. As a result, resorts have been closed this winter across much of Europe, including in France, Germany and Italy. These precautions protect remote mountain towns from an influx of the virus, but there are other, massive costs associated with closing down. Without government support, there is little option for communities like Jackson but to stay open, follow existing public health guidelines and hope for the best. “When the pandemic first started coming to work felt like entering the lion’s den,” said the restaurant worker from Jackson who wished to remain anonymous. “But by now we’re all used to the risk, and really what choice do we have?”
The U.S. economy shrank 3.5 percent in 2020 as the coronavirus pandemic shuttered businesses, schools and events, marking the first annual contraction since the Great Recession, according to data released by the Commerce Department on Thursday.
U.S. gross domestic product (GDP) suffered its largest annual decline since 1946 due to the coronavirus pandemic, according to the Commerce Department release. The outbreak of COVID-19 caused the steepest economic collapse since the Great Depression, wiping out more than 20 million jobs and years of economic growth within two months.
U.S. GDP increased by an annualized rate of 4 percent in the final three months of 2020, according to the data released Thursday, following an annualized gain of 33.4 percent in the third quarter and a 31.4 percent annualized decline in the second quarter. But the economic rebound staged in the second half of 2020 has been dampened by the continued rapid spread of COVID-19 throughout the country.
The U.S. economy came into 2020 remarkably strong. Unemployment reached a 50-year low of 3.5 percent in the previous year, inflation remained low and the U.S. had just set a record for the longest economic expansion in its modern history. While the U.S. was likely to face some headwinds from slowing economies overseas, the stunning emergence of the coronavirus pandemic shattered the strong labor market and forced thousands of businesses to shutter.
Consumer spending — which makes up nearly two-thirds of the U.S. economy — fell 2.6 percent in 2020, driven mainly by a 3.4 percent decline in spending on services. Spending on goods rose 0.8 percent, however, as purchases shifted from gatherings to products that could be used during lockdowns.
Economists expect the U.S. economy to bounce back quickly in the second half of 2021, assuming enough Americans are vaccinated to prevent large coronavirus outbreaks. Both economists and health experts insist that a full return to normal is not possible until the pandemic is defeated.
Roughly 9 million jobs lost during the onset of the pandemic have yet to be recovered, and those without work have struggled to get by with swaths of the economy still largely shut down by the virus. The federal government approved more than $4 trillion to fund pandemic response and economic rescue in 2020, though Democratic lawmakers and many economists say more is still needed.
President Biden and congressional Democrats are pushing to pass another $1.9 trillion COVID-19 bill meant to ramp up vaccine distribution and offer more economic relief to those in the greatest need.
Republican lawmakers have not ruled out passing another relief bill, but most object to the size and scope of Biden’s proposal after approving a $900 billion measure in December.
Treasury Secretary Janet Yellenand Federal Reserve Chairman Jerome Powell have both warned lawmakers that the risks of holding back on necessary fiscal relief are far greater than adding more to the national debt or risking an increase in inflation.
“I’m much more worried about falling short of a complete recovery and losing peoples’ careers and lives and the damage that will do to productive capacity than about the possibility of higher inflation,” Powell said Wednesday.
America’s billionaires have added a staggering $1.1 trillion to their collective wealth since the pandemic began.Their combined fortunes now sit at $4.1 trillion — $1.7 trillion more than the amount of wealth held by the bottom half of Americans.
Meanwhile, the country’s poverty rate increased by 2.4 percentage points in the latter half of 2020 — the largest increase in poverty since the 1960s. And to think that Senate Republicans are decrying a $1.9 trillion COVID relief bill as too expensive.
Please. America’s billionaires alone could finance most of that bill, just with the increase in their wealth over the last 10 months. An emergency wealth tax that used their $1.1 trillion windfall to pay for the COVID survival plan would put these billionaires back to where they were 10 months ago (still very comfortable, to say the least) while helping the rest of America survive.
This is the sort of trickle-down economics that could actually work. What do you think?
As one of his first official actions upon taking office Wednesday, President Biden signed an executive order implementing a federal mask mandate, requiring masks to be worn by all federal employees and on all federal properties, as well as on all forms of interstate transportation. Yesterday Biden followed that action by officially naming his COVID response team, and issuing a detailed national plan for dealing with the pandemic. Describing the plan as a “full-scale wartime effort”, Biden highlighted the key components of the plan in an appearance with Dr. Anthony Fauci and COVID response coordinator Jeffrey Zients.
The plan instructs federal agencies to invoke the Defense Production Act to ensure adequate supplies of critical equipment, including masks, testing equipment, and vaccine-related supplies; calls for new nationalguidelines to help employers make workplaces safe for workers to return to their jobs, and to make schools safe for students to return; and promises to fully fund the states’ mobilization of the National Guard to assist in the vaccine rollout.
Also included in the plan is a new Pandemic Testing Board, charged with ramping up multiple forms of COVID testing; more investment in data gathering and reporting on the impact of the pandemic; and the establishment of a health equity task force, to ensure that vulnerable populations are an area of priority in pandemic response.
But Biden can only do so much by executive order. Funding for much of his ambitious COVID plan will require quick legislative action by Congress, meaning that the administration will either need to garner bipartisan support for its proposed “American Rescue Plan” legislation, or use the Senate’s budget reconciliation process to pass the bill with a simple majority (with Vice President Harris casting the tie-breaking vote). Even that may prove challenging, given skepticism among Republican (and some moderate Democratic) senators about the $1.9T price tag for the legislation.
We’d anticipate intense bargaining over the relief package—with broad agreement over the approximately $415B in spending on direct COVID response, but more haggling over the size of the economic stimulus component, including the promised $1,400 per person in direct financial assistance, expanded unemployment insurance, and raising the federal minimum wage to $15 per hour.
Some of the broader economic measures, along with the rest of Biden’s healthcare agenda and his larger proposals to invest in rebuilding critical infrastructure, may have to wait for future legislation, as the administration prioritizes COVID relief as its first—and most important—order of business.
On January 14, 2021, Planned Parenthood Southeast and the Feminist Women’s Health Center filed a lawsuit challenging the Trump administration’s approval of Georgia’s waiver under Section 1332 of the Affordable Care Act (ACA). The lawsuit was filed in federal district court in DC. This post summarizes that legal challenge as well as parts of President Biden’s recent proposed pandemic relief package that relate to the ACA and coverage. The $1.9 trillion American Rescue Plan includes several coverage-related proposals and would follow the pandemic relief passed by Congress in December 2020.
Advocates Challenge The Approval of Georgia’s 1332 Waiver
Regular readers know that the Trump administration—through the Centers for Medicare and Medicaid Services (CMS) and the Treasury Department—approved a broad waiver request from Georgia under Section 1332 of the ACA. The approved waiver authorizes the state to establish a reinsurance program for plan year 2022 and eliminate the use of HealthCare.gov beginning with plan year 2023. CMS and Treasury approved the waiver application on November 1, 2020. The history of Georgia’s waiver application and approval is summarized in prior posts as well as in the complaint filed in the lawsuit.
The reinsurance portion of the waiver is straightforward; of the 16 states with an approved Section 1332 waiver, all but one state has established a state-based reinsurance program. But the second part of the waiver application, known as the Georgia Access Model, is far more controversial. This is the broadest waiver yet to be approved under Section 1332 and relies on interpretations of Section 1332 made in much-criticized Trump-era guidance from 2018.
Critics have long argued that Georgia’s proposal fails to satisfy Section 1332’s procedural and substantive guardrails, meaning it could not be lawfully approved by the Trump administration. Given this controversy, legal challenges to the waiver approval were expected.
The Lawsuit
Planned Parenthood Southeast and the Feminist Women’s Health Center—represented by Democracy Forward—filed a lawsuit in federal district court in DC on January 14, 2021. The lawsuit alleges that the Trump administration’s 2018 guidance and approval of Georgia’s waiver are unlawful because these actions violate Section 1332 of the ACA and the Administrative Procedure Act (APA). The lawsuit also cites many of the Trump administration’s ongoing efforts to undermine the ACA as evidence that the 2018 guidance and waiver approval are part of a pattern of ACA sabotage.
In particular, the plaintiffs argue that the 2018 guidance and waiver approval are contrary to Section 1332, exceed the scope of the agencies’ authority (by allowing states to waive non-waivable provisions of the ACA), and are arbitrary and capricious. They also argue that the waiver approval failed to satisfy procedural requirements under the ACA and APA because Georgia and the Trump administration “rushed through the process without adequate time for public comment and without adequate clarification of how the state intends to approach key issues.” Here, the lawsuit points to the fact that Georgia went through four iterations of its waiver application, that its application was incomplete, and that only eight comments (less than one half of one percent) of the 1,826 total comments submitted during the most recent federal public comment period were in support of the Georgia Access Model.
As such, the plaintiffs ask the court to vacate both the approved waiver and the 2018 guidance and declare that they are unlawful. They also ask that the federal government be enjoined from taking further action on Georgia’s waiver or considering other waivers under the 2018 guidance. The plaintiffs acknowledge that the reinsurance portion of the waiver is uncontroversial and that the focus of the lawsuit is on the Georgia Access Model; however, the plaintiffs challenge approval of the waiver as a whole and ask the court to set aside the waiver in whole or in part. The plaintiffs have not sued Georgia, although it is possible that Georgia may ask to intervene in the litigation to defend its interests.
Much of the lawsuit turns on how the Trump administration interpreted the statutory guardrails under Section 1332 and long-standing concerns about direct enrollment and enhanced direct enrollment.Federal officials can grant a Section 1332 waiver only if a state demonstrates that their proposal meets certain statutory “guardrails.”These guardrails ensure that a waiver proposal will 1) provide coverage that is at least as comprehensive as ACA coverage ( “comprehensiveness” guardrail); 2) provide coverage and cost-sharing protections that are at least as affordable as ACA requirements (“affordability” guardrail); 3) provide coverage to at least a comparable number of residents as under the ACA ( “coverage” guardrail); and 4) not increase the federal deficit. The Obama administration issued guidance in 2015 on its interpretation of these guardrails.
In 2018, the Trump administration replaced that guidance and adopted its own interpretation, which manyargued was inconsistent with Section 1332. The 2018 guidance tried to pave the way for the Trump administration to approve waivers where only some coverage under the waiver (instead of all coverage) satisfied the comprehensiveness and affordability guardrails. Under this view, waivers could be approved even if only some coverage under the waiver was as comprehensive, as affordable, and as available as coverage provided under the ACA. The 2018 guidance would also allow waivers to expand access to plans that do not have to meet the ACA’s requirements. (Separately, the Trump administration issued a final rule to codify the 2018 guidance’s interpretations into regulations.)
The lawsuit argues that the Georgia Access Model violates all four statutory guardrails because it will “drastically underperform the ACA.” The waiver proposal could lead to net enrollment losses in Georgia, which violates the coverage guardrail. The waiver could lead some consumers to enroll in non-ACA plans (such as short-term plans) with benefit gaps, which violates the comprehensiveness guardrail. And consumers will have to pay higher premiums and out-of-pocket costs through higher broker commissions, reduced competition, and adverse selection against the ACA markets, which violates the affordability guardrail and potentially the deficit neutrality guardrail (since higher ACA premiums mean higher federal outlays in the form of premium tax credits).
As health care providers in Georgia, Planned Parenthood Southeast and the Feminist Women’s Health Center allege they will be harmed for several reasons. They argue that the Georgia Access Model will make it more difficult and expensive for their patients to obtain health insurance. Fewer patients with health insurance will result in higher levels of uncompensated care. More uncompensated care will strain the plaintiffs’ resources and limit other services, such as community outreach. The loss of coverage resulting from the waiver will leave their patients in worse health and develop more complex treatment needs, making it more expensive for plaintiffs to treat those patients as a result. And approval of the waiver will make it more complicated for the plaintiffs to assist their patients with enrollment.
What Happens Next
The lawsuit was assigned to Judge James E. Boasberg of the federal district court for DC. Health policy watchers know Judge Boasberg as the judge who repeatedly invalidated the Trump administration’s approval of state Section 1115 waivers with work and community engagement requirements. He is thus no stranger to assessing the legality of waiver approvals under the APA and other federal statutes.
The lawsuit will proceed, and the Biden administration will be responsible for filing a response in court. One potential option could be for the Biden administration to ask the court for a stay while it revisits the approved waiver and perhaps holds another round of public comment on the most recent version of the waiver (which, as the lawsuit points out, was never submitted for public comment). The Biden administration could consider any new comments in reevaluating approval of the Georgia Access Model.
If the federal government newly concludes that the proposal fails to satisfy the substantive guardrails, it could have grounds to amend, suspend, or terminate Georgia’s waiver, so long as certain procedures are followed. This is because the terms and conditions of the waiver agreement between the federal government and Georgia (as well as implementing regulations) always give the federal government “the right to suspend or terminate a waiver, in whole or in part, any time before the date of expiration, if the Secretaries determine that the state materially failed to comply with the terms” of the waiver.
Georgia’s waiver agreement includes some unique terms and conditions relative to waivers in other states. Those terms seem designed to limit the federal government’s ability to suspend or terminate Georgia’s waiver. But the federal government can do so as long as it complies with relevant procedures. This includes notifying Georgia of its determination, providing an effective date, and citing reasons for the amendment or termination (i.e., why the Georgia Access Model fails to satisfy Section 1332’s substantive guardrails). Georgia would have 90 days to respond, with the possibility of providing a corrective action plan to come into compliance with the waiver conditions. Georgia must also be given an opportunity to be heard and challenge the suspension or termination.
Alternatively, the Biden administration could regularly assess and monitor the state’s compliance with the terms and conditions and its progress, or lack thereof, in implementing the Georgia Access Model. Federal officials do this with all waivers. Under the waiver approval, Georgia must, for instance, satisfy requirements related to funding, reporting and evaluation, development of an outreach and communications plan, and operational standards for eligibility determinations. If Georgia fails to comply with these terms and conditions, that too would be grounds to initiate the process to amend or terminate parts or all of Georgia’s waiver.
Coverage Provisions In Biden’s American Rescue Plan
On January 14, a few days before taking office, President Biden issued a 19-page fact sheet outlining his proposed American Rescue Plan to contain the COVID-19 virus and stabilize the economy. The announcement praised the bipartisan package adopted in December 2020 as “a step in the right direction” but notes that Congress did not go far enough to fully address the pandemic and economic fallout. Following Inauguration Day, Biden is expected to lay out an additional economic recovery plan.
Among many other initiatives, the comprehensive $1.9 trillion plan would provide funding for a national vaccination program, create a new public health jobs program, provide funding for schools to reopen safely, extend and expand emergency paid leave, extend and expand unemployment benefits, raise the minimum wage, and deliver $1,400 in support for people across the country. The Biden plan also calls for preserving and expanding health insurance, noting that 30 million people were uninsured even before the pandemic and that millions may have lost job-based coverage in 2020.
First, the American Rescue Plan calls for Congress to provide COBRA subsidies through the end of September. Presumably, these subsidies would be available from the beginning of 2021, rather than subsidizing premiums from 2020. COBRA subsidies during an economic emergency are not new. Congress subsidized COBRA premiums during the 2008 recession, with mixed results. Full COBRA subsidies were included in the original Heroes Act passed by the U.S. House of Representatives in May 2020, although not in the revised Heroes Act that was passed by the House in October 2020. But neither bill was ever taken up by the U.S. Senate. It is not clear from the fact sheet whether the Biden administration is aiming for full COBRA subsidies where the government would pay 100 percent of the premiums for COBRA coverage for laid-off workers and furloughed employees—or some other amount (e.g., 80 percent of premiums).
Second, the American Rescue Plan would accomplish one of candidate Biden’s key campaign promises by expanding and increasing the value of premium tax credits under the ACA. Democrats in Congress have repeatedly passed legislation that would accomplish what the American Rescue Plan fact sheet seems to call for. For instance, the Patient Protection and Affordable Care Enhancement Act—passed by the House in July 2020—would have expanded the availability of premium tax credits to those whose income is above 400 percent of the federal poverty level and made those credits more generous by reducing the level of income that an individual must contribute towards their health insurance premiums to 8.5 percent for those with the highest incomes. This subsidy expansion and enhancement would improve the affordability of coverage for millions of Americans who purchase coverage in the individual market.
Beyond COBRA and ACA subsidies, the American Rescue Plan calls for additional funding for veterans’ health care needs and for the Substance Abuse and Mental Health Services Administration and the Health Resources and Services Administration to expand access to behavioral health services. The proposal would also increase the federal Medicaid assistance percentage (FMAP) to 100 percent for the administration of COVID-19 vaccines to help ensure that all Medicaid enrollees will be vaccinated. The proposal does not appear to otherwise mention Medicaid, which is serving as a key safety net as incomes have dropped for millions of Americans, despite bipartisan support for an enhanced FMAP during the pandemic.
The number of new unemployment claims filed last week jumped by 181,000 the week before to 965,000, the largest increase since the beginning of the pandemic.
It was the largest number of new unemployment claims since August.
An additional 284,000 claims were filed for the Pandemic Unemployment Assistance, the insurance for gig and self-employed workers.
The weekly report is President Trump’s last before President-elect Joe Biden is sworn in on Jan. 20. Biden will inherit a labor market badly weakened by the coronavirus pandemic and an economic recovery that appears to have stalled: 140,000 people lost their jobs in December, the first decline in months, with the U.S. still down millions of jobs since February.
The dire numbers will serve as a backdrop for Biden as he formally unveils an ambitious stimulus package proposal on Thursday, which could top $1 trillion, and is expected include an expansion of the child tax credit, a $2,000 stimulus payment, and other assistance for the economy.
Democrats were already using the weak labor to argue about the necessity of more aid.
Economists say that the economy’s struggles could be explained, in part, by the delay Congress allowed between the summer, when many fiscal aid programs expired and December, when lawmakers finally agreed on a new package after months of stalemate.
The number of new jobless claims has come down since the earliest days of the pandemic, but remains at a extremely high level week in and week out.
The total number of continuing people in any of the unemployment programs at the end of the year was 18.4 million, although officials have cautioned that the number is inflated by accounting issues and duplicate claims.
The increase in claims is not entirely unexpected. As the aid package passed by Congress in December kicks in, including a $300 a week unemployment supplement, some economists expected that to result in more workers filing claims.
HENRY KOTULA 