Cross-posted from the National Journal's health care blog. The Journal posed this question:
Would it really do much good to extend the length of COBRA health insurance coverage as part of an economic stimulus package? Would people really sign up? Does COBRA ever really work well?
Yes, make COBRA easier to get and easier to use. People are losing their jobs and losing their coverage, so there's no time to waste. With unemployment at a 16-year high, expect the ranks of the uninsured to swell, putting more strain on state programs that help those in need. COBRA - if made to work - can literally be a lifeline.
Part of the problem with COBRA is that many workers don't qualify as it is - if their employers don't offer coverage in the first place or if their employers go out of business.
What's more, COBRA is unaffordable even to those who are eligible, as the Families USA report makes clear. People who are unemployed are often barely able to pay their mortgages, much less the full cost of a health care premium. Even 20% of the premium would be a financial strain on most unemployed workers, given that the cost of an individual premium is more than $4,000 and family coverage exceeds $12,000.
The solution:
- Allow workers who don't have access to COBRA the opportunity to enroll in Medicaid with a small premium contribution - no more than 5% of their income.
- Provide COBRA-eligible workers with a subsidy or tax credit that covers 80% of the premium.
- Expand the time period for COBRA eligibility - currently 18 months in most cases - to 36 months, given the severe economic downturn. Older workers in particular may have the hardest time finding another job.
Rising unemployment is making our health care crisis even worse, highlighting the need for comprehensive reform. We can't get the economy back on track without fixing health care, and workers can't get back to work if they're sick or have lost their homes due to medical debt. Let's fix COBRA now, so the downturn doesn't push more families into financial ruin.
