Iowa Democrats worry ‘Medicare for All’ hurts key industry

DES MOINES, Iowa (AP) — Kim Motl doesn’t work in the health insurance industry. But her friends and neighbors do. So when she saw Sen. Elizabeth Warren recently in Fort Dodge, Iowa, Motl pressed the Democratic presidential candidate about her “Medicare for All” plan, which would replace private insurance with a government-run system.

“What about the little guys that work in the insurance business, that support our communities? The secretary that works for them, but maybe supports their family, what happens to them?” the 64-year-old housing advocate asked the senator.

“What happens to all of those people who lose their jobs?” Motl asked in a later interview.

Warren reassured her that jobs would not be lost because of her plan. But the exchange is a reminder that while railing against the insurance industry can score points with the progressive Democratic base, it can also alienate potential supporters in Iowa, where voters will usher in the presidential primary in less than two months.

Nearly 17,000 Iowans are either directly employed by health insurance companies or employed in related jobs, according to data collected by America’s Health Insurance Plans, an industry advocacy group. Des Moines, the seat of the state’s most Democratic county, is known as one of America’s insurance capitals partly because of the high number of health insurance companies and jobs in the metro area. Wellmark Blue Cross Blue Shield’s health insurance headquarters employs roughly 1,700 in the metro area, and that’s just one of the 16 health insurance companies domiciled in Iowa, according to the Iowa Insurance Division.

For many Iowans, the Medicare for All debate is personal, and the prospect of losing a job could influence whom they support in the Feb. 3 caucuses.

Tamyra Harrison, vice-chair of the East Polk Democrats, says she has heard worries at her local Democratic meetings about “the effect it would have on people that work in the insurance industry, and those that have small businesses in the area.”

“They’re concerned about the repercussions on people living here that maybe the Democrats aren’t thinking of” when they’re talking about eliminating private insurance, she said.

The Democrats’ health care plans vary widely in terms of the speed and scope with which they would affect health care industry jobs, but experts say every plan marks a substantial reconfiguring of one of the country’s biggest industry and thus all would affect thousands of jobs nationwide.

Some, including Warren and Sen. Bernie Sanders of Vermont, have called for replacing private insurance with a government plan. Asked about this last month in Iowa, Warren said, “Some of the people currently working in health insurance will work in other parts of insurance — in life insurance, in auto insurance, in car insurance,” or for the new government-run system. She also cited five years of “transition support” for displaced workers built into the plan.

Sanders has previously argued that his plan would see “all kinds of jobs opened up in health care,” and his bill includes a fund to help retrain and transition private insurance workers out of their current jobs.

Former Vice President Joe Biden and Mayor Pete Buttigieg of South Bend, Indiana, would leave room for private insurers, but also include a public option, which they have acknowledged could ultimately put insurance companies out of business. Sen. Cory Booker of New Jersey is trying to walk a line on the issue, having signed onto Sanders’ Medicare for All bill in the Senate but on the campaign trail shied away from eliminating private insurance entirely.

Even those who say they would keep private insurance companies face risks. Buttigieg revealed this week that he worked for Blue Cross Blue Shield in Michigan during his time as a consultant at McKinsey & Co. He said he “doubts” his work contributed to layoffs the company later announced and has instead sought to highlight the impact of his opponents’ plans.

“There are some voices in the Democratic primary right now who are calling for a policy that would eliminate the job of every single American working at every single insurance company in the country,” he said.

Economists say the jobs impact of any shift away from private health care would be felt nationwide by hundreds of thousands of Americans. It’s not just jobs at private insurance companies that could be affected; those working on processing insurance claims at hospitals and other administrative health care jobs could be reduced as well.

According to the Bureau of Labor Statistics, in 2018, nearly 386,000 Americans were employed by health and medical insurance carriers — but some analysts found the number of jobs lost from eliminating private insurance could be much higher. Economists at the University of Michigan found in an analysis of Sanders’ Medicare for All bill that the jobs of nearly 747,000 health insurance industry workers, and an additional 1.06 million health insurance administrative staffers, would no longer be needed if Medicare for All became law.

In Iowa, however, the issue could be particularly problematic.

Around Des Moines, “you can’t swing a dead cat without finding someone who works at an insurance provider or a company,” said Mary McAdams, chair of the Ankeny Area Democrats. She said she believes Democrats in her area aren’t as concerned about what would happen to their jobs if private insurance were eliminated because they don’t have much allegiance to their companies to begin with.

“They know full well these companies would drop them like a habit,” she said.

The economic repercussions of eliminating private insurance jobs could go beyond simply the loss of local jobs, as Paula Dierenfield, a Republican lawyer and the executive director of the Federation of Iowa Insurers, points out.

“This is an industry that employs thousands of employees in high-quality jobs,” she said. “All of those employees pay income taxes, sales taxes, property taxes, and the companies that they work for also pay millions in premium taxes, as well as property taxes. So it would have a significant impact on the Iowa economy generally as well as here in the Des Moines metro area.”

The peripheral effects of eliminating insurance jobs worry Marcia Wannamaker, a real estate agent from West Des Moines who raised her concerns about the fate of private insurance during a recent question-and-answer session with Biden.

“It’s really going to cut our jobs,” Wannamaker said.

She later noted in an interview that if the private insurance industry shrinks, people working for such companies would lose their jobs.

“Then that trickles down to the housing. They’re going to have to move. I just think it’s going to be a disaster,” she said. “When you sell real estate, these people buy homes. It’s just part of how the Iowa — and especially in Des Moines, the economy works.”