The federal law that allows newly unemployed workers to pay to stay in their former employer's insurance plan for 18 months is well-intended. In theory, it creates a health care bridge until a new job is found. In practice, it often proves to be unworkable.
COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act of 1985, has become unaffordable for many families just at the moment when unemployment rates are climbing. The stimulus package that is moving forward in Congress includes needed stopgap measures to keep the newly unemployed – such as the 40,000 workers whose pink slips were announced Monday – from joining the ranks of the uninsured.
In Florida and eight other states, COBRA coverage for a family is higher than monthly unemployment benefits, according to a new report from Families USA, a nonprofit health care advocacy group. An unemployed worker in Florida will pay an average of $1,037 a month to insure a family through COBRA. The average monthly unemployment benefit is just $1,013. No matter how it's done, the math just doesn't work.
Democratic leaders in Congress have some good ideas to address COBRA's shortfalls. Under the stimulus package being offered in the House, the government would subsidize COBRA payments and reduce barriers to Medicaid for the newly jobless. Both ideas have merit as the nation's unemployed ranks swell to 7.2 percent, a 16-year high, and as 47 million Americans are without health insurance.
Keeping jobless families in their private group health plans is sensible public policy. It helps maintain cost-savings for a large group plan for all its members and keeps jobless families from losing coverage. But it isn't reasonable to tell unemployed workers that every penny of their unemployment benefits should go to maintaining their health coverage.
The stimulus package moving in the House would grant a 65 percent subsidy of COBRA for 12 months for people who lost their jobs as a result of the economic downturn. This generous benefit would provide families a true safety net but also maintain a personal investment in coverage. Another provision would grant newly jobless workers 55 and older the opportunity to remain in COBRA until they find a new job with coverage or turn 65 and qualify for Medicare.
For the low-income jobless, the House stimulus package would give states money to revamp Medicaid, allowing broader eligibility. Now Medicaid covers the very poor and disabled. Under the new proposal, states could make Medicaid available to newly unemployed workers whose incomes do not exceed a state-determined level but no more than 200 percent of the federal poverty level.
President Barack Obama has promised a comprehensive overhaul of the health care system, but such reform will likely wait as the administration wrestles with economic issues. Families losing their jobs cannot wait, and Congress should act now to bridge this health care gap. Sensible and compassionate government programs have the ability to help more families survive in this economy. As the stimulus package or other national relief efforts move forward, so should providing a sturdier health care safety net for the nation's unemployed.