COBRA is a law that allows you to keep your employer-sponsored health insurance for 18 months if you lose or change jobs. To do so, you have to pay 102% of the cost (the full premium plus a 2% surcharge.)
The stimulus package just passed provides for laid off workers, who had health insurance on the job, to receive a subsidy of 65% of the health insurance premium for up to nine months.
According to a report by FamiliesUSA, the national average unemployment benefit is $1,278 monthly. Under COBRA, national family coverage averages $1,069 per month. So laid off workers, in order to keep health insurance for their families, will have to pay more than $375 a month but after nine months will have to come up with the full $1,069.
Here in New York, to keep family health insurance under COBRA costs an average of $13,618 a year, 85% of the average unemployment benefit in New York. For those eligible in New York, the 9-month COBRA subsidy will lower the the average cost for a family to keep health insurance to about $7,000 for a full year. The family also gets to keep the out-of-pocket expenses — co-pays, co-insurance and deductibles.
A recent study by the Commonwealth fund reported that only 9% of unemployed workers continued health insurance under COBRA. The 65% subsidy should allow some to consider keeping health insurance under COBRA, where before it would have been just unthinkable. This can help those with chronic illnesses, or those with very sick family members, or where a spouse continues working.
To keep family coverage under COBRA, with the subsidy, for up to nine months, it will cost people who are laid off, on average, one-third of every unemployment check. This money will go to a health insurance company, instead of food, housing and school expenses for the family.
But while the subsidy makes private health insurance through COBRA slightly more affordable for the unemployed, purchasing it remains a Faustian bargain. What “stimulus” is there in asking a person who has just lost their job to give a third of each unemployment check to the private insurance industry? And what will they do after nine months have come and gone?
Despite the good intentions in Congress and the White House, subsidized COBRA payments are not feasible for the unemployed — and terrible policy for the nation. There is no reason on why Congress should shovel our money into an industry that pits its profits against our health, with a program that holds one-third of our limited unemployment check hostage and only lasts nine months.
If the leaders of this nation wanted to provide health security for all they would enact a single-payer mechanism to finance health care.
Single payer would mean that no one would ever be without health care. Not first time job seekers, not workers changing jobs, not laid off or striking workers. Everyone would be covered.
A single payer health program would: — save at least $400 billion in health spending per year, — create millions of new jobs, — create enormous savings for employers (including federal, state and local governments as well as schools and not-for-profit agencies) who now pay private health insurance premiums, — allow the unions to get back to bargaining for wages and working conditions instead fighting over premiums, co-pays, deductibles, co-insurance payments, dental, vision, drug coverage, mental health benefits, etc.– and, in relieving the worry about health coverage that comes with the loss of a job, single payer would raise us all up.
Now that would be a stimulus! We really need single payer national health care.
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