Ending the COVID Public Health Emergency and More

Good morning,

Although high inflation driven by misguided government policy dominates the national political conversation, the government’s numerous COVID-related failures are also in the news. Paragon’s experts and advisors have highlighted several recent problems. 

Two of Paragon’s initiative directors, Dr. Joel Zinberg (Public Health and American Well-Being initiative) and Gary Alexander (Medicaid and Health Safety Net Reform initiative), teamed up for an important Wall Street Journal op-ed yesterday. Joel and Gary make two key points:

  1. The actual COVID public health emergency is over.
  2. The Biden administration is continuing the public health emergency to “preserve the expansion of the welfare state through Medicaid.”

Medicaid enrollment and spending exploded during the pandemic as Congress passed legislation that boosted the federal government’s share of Medicaid costs in exchange for states keeping everyone enrolled, even when they were no longer eligible. Now 15 million or more people who are ineligible are enrolled in Medicaid. The federal spending boost, which is highly inflationary, and the Medicaid enrollment requirements persist with the official public health emergency.

But as Joel and Gary write, “In reality, the health emergency is already over. New Covid cases rose in May but remained low compared with other points in the pandemic and have started to decline. Hospitalizations rose but remained low, and Covid deaths continued a months-long decline. Vaccines and therapeutics are readily available, too.”

Last month, the Biden administration decided to continue the public health emergency through the fall, and many expect it will continue until 2023—after the mid-term elections. And the administration’s guidance for when states can resume eligibility reviews “seems designed to prolong the coverage of ineligible beneficiaries rather than end it. It includes extensive procedural obstacles for removing ineligible enrollees and provides no consequence for states that fail to meet the disenrollment deadline.”

Joel and Gary conclude: “Extending the public-health emergency is a Trojan horse for further government takeover of the healthcare system through a massive expansion of Medicaid to cover those who aren’t even eligible. Washington should end the emergency so states can ensure Medicaid is reserved for those who are actually eligible.”

Government-Caused COVID Testing Inefficiencies

Also writing recently in the Wall Street Journal, Johns Hopkins University health policy professor and Paragon advisor Ge Bai with University of Hawaii economics professor Tim Halliday criticize several government policies that allowed private labs to earn inefficiently large profits on COVID tests.

The first problem is that Medicare administratively set a reimbursement rate of $51 per test. While this rate was likely reasonable during the early stages of the pandemic, it is now clearly too high given economies of scale. The Medicare rate often serves as the floor for private insurer payment rates for tests. 

The second problem is a provision of the Families First Coronavirus Response Act that prohibited cost-sharing for tests. Since patients were insensitive to price, they lacked any incentive to search for cheaper labs, which reduces price competition among test suppliers.

A third problem identified by Ge and Tim is that “the Cares Act explicitly discouraged insurers from negotiating prices with out-of-network labs, thus strengthening the market power that labs already had.”

CDC’s Kangaroo Court

Many Americans are no longer listening to the Centers for Disease Control (CDC) because of the clear politicization of the agency and its failure to follow evidence, science, and common sense. Writing in Newsweek on June 10, Johns Hopkins School of Medicine professor and Paragon advisor Marty Makary discusses the “Kangaroo court” that CDC put together to determine whether to recommend COVID-19 boosters shots for children 5-11 years old. Makary cites data that the vast majority of kids under the age of 11 already have natural immunity and that natural immunity is much more effective at preventing infection and hospitalization compared to vaccination. According to Makary, “Instead of pushing boosters on healthy children who are already immune, public health officials should focus on recommending the primary COVID vaccine series to high-risk children who don’t have any immunity.” 

Biden Administration’s Need for a Reboot

For good reason, Americans are increasingly pessimistic about the competency and effectiveness of their government. One of the problems with the Biden administration’s approach is an overreliance on government and preference for centralization.

Writing in The Hill, Paul Mango—the deputy chief of staff for the Department of Health and Human Services from 2019-2021 and a Paragon advisor—says that despite many missteps and a problematic approach to date, the Biden administration can learn from the success of Operation Warp Speed.

The defining and fundamental principle underpinning Operation Warp Speed’s spectacular achievements was simple and easily replicated: The federal government’s role is to enable success, while the private sector’s role is to deliver success. Its corollary, of course, is to never permit the federal government to engage in activities the private sector can perform more competently.

All the best,
Brian Blase
President
Paragon Health Institute

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Paragon Health Institute (PHI) is a non-partisan, not-for-profit policy research institute. Any views, beliefs, or opinions expressed by PHI’s Public Advisors are those of its Advisors and do not necessarily reflect the official policies or positions of PHI or its employees. Any views, beliefs, or opinions expressed by PHI or its employees belong solely to PHI and do not necessarily reflect those of PHI’s Public Advisors.