Despite campaigning for decades on creating a public paid leave program within the Social Security system, House Democrats, led by Richard Neal, are now proposing a paid leave system largely consisting of public subsidies for paid leave plans operated by employers and private insurance companies.
Lee Harris has an excellent piece at The American Prospect about this focusing on the various actors involved in such legislation and why things have taken this turn towards privatization.
For some of the actors, the reasons are pretty obvious. Private insurance companies have been lobbying for this change because they like getting free money for doing things that could be done more cheaply and more efficiently by the public. And lawmakers are, as always, on the take from the private insurance companies: the insurance company that stands to most benefit from the plan, Sun Life, has donated to ten members of the Ways and Means committee that made this change.
But for other actors, like paid leave advocates and organizations, it’s less clear why they have so quickly acquiesced to the gutting of a policy they have been working on for much of their lives. Shouldn’t they be sounding the alarm loudly and publicly right now in order to defend paid leave from a private insurance takeover or, at minimum, refrain from actively promoting the House plan? After all, the Senate has yet to chime in on this and could very well decide to go with something more like the longstanding FAMILY Act, which creates a public paid leave system.
Harris quotes two of these advocates in her piece and mentions an interesting fact about a third.
Vicki Shabo of New America and previously of the National Partnership for Women & Families (NPWF) had this to say:
“We’re in the sausage-making stage of this legislation, so there may have been considerations at play incoming from other stakeholders in the private sector,” Shabo told the Prospect. She said the current version is an improvement on a draft plan Neal put out in April.
“If we were creating a system from scratch, we might try to insure everybody through a public program … However, I trust the judgment of the Ways and Means Committee and of politicians who need to square the fact that there are lots of different interests at play,” Shabo concluded.
Shabo simply seems resigned to the idea that paying a ransom to private insurers may just be a cost of doing business. After all, the Social Security Administration can’t make contributions to members of the Ways & Means committee the same way that Sun Life can.
Next up is Dawn Huckelbridge of Paid Leave for All:
“We don’t want to say, if someone really likes their plan, that we’re going to take it away,” Dawn Huckelbridge, director of the advocacy group Paid Leave for All, said in an interview with the Prospect.
Here Huckelbridge tries to copy over arguments against national health insurance and apply them to arguments against national paid leave. Old-timers will remember it as the Obama talking point about the Affordable Care Act: “if you like your plan, you can keep it.”
Putting aside the basic absurdity of saying individuals get to keep their paid leave plan when it is their employer that decides what plan they have and indeed whether they are employed at all, Huckelbridge is simply wrong to suggest that the existing paid leave plans that cover a small minority of workers are going to be preserved by the House bill. They won’t.
Under the bill, the only way for an employer plan to receive the new federal subsidies is if that employer plan meets the minimum standards established in the bill. If they don’t meet them, then their employees end up covered by the federal component of the bill.
No data exists on how many current employer plans meet all of the standards set out in the bill, but the number is probably very close to zero. We know this because literally zero state paid leave plans meet all the standards set out in the House bill. California, DC, and Rhode Island don’t provide enough weeks. Massachusetts and New York don’t provide enough wage replacement. Washington and New Jersey don’t provide a high enough maximum benefit. The number of existing employer plans that tick off all three of these requirements along with many other requirements cannot be more than a handful.
What this means then is that the House plan is absolutely taking away virtually all existing paid leave plans. Every state and every employer will have to create new plans that provide different coverage in order to operate with subsidies under the scheme. Huckelbridge is simply lying about this.
The last advocate mentioned in the piece is the National Partnership for Women & Families (NPWF), which has up to this point really been the top organization operating on this topic. They are not quoted in the piece, but Sun Life’s president, Dan Fishbein, is quoted as saying that his company is working in collaboration with the NPWF.
I would be interested to know more about this collaboration and especially whether any money has changed hands as part of it. NPWF is already awash in insurance company money and lists as its major donors UnitedHealth, Anthem, Cigna, Humana, Aetna, and BlueCross BlueShield.