Critical Condition
San Francisco Chronicle
October 23, 2001
by Victoria Colliver
"With the recent surge in layoffs, many of the unemployed find themselves having to choose between paying for health care insurance or something as basic as rent."
"Many workers have the option of COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act. The 1986 law allows employees to continue their coverage for about 18 months, during which they usually pay the entire premium plus a 2 percent administrative fee -- a pricey option considering that most employers subsidize much of their employees' premiums."
"With employer group plans costing as much as $2,650 per year on average for an individual and more than $7,000 for a family annually, the burden on laid-off workers to pick up the tab while they are searching for a new job can be a frustrating, back-breaking task."
"In the Bay Area, the problem is exacerbated by the large number of employees who aren't entitled to COBRA because they worked for dot-com companies that simply closed up shop."
Gail Shearer, director of health policy analysis for Consumers Union:
"If you're losing your income, chances are you're not going to be able to come up with the $7,000 you need to cover your family's health insurance needs."
<http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/10/23/BU240187.DTL>http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/10/23/BU240187.DTL
Comment: Several members of Congress are attempting to enact legislation that would provide subsidies for the COBRA program in order to enable the continuation of health care coverage for the increasing numbers of unemployed individuals. Because COBRA benefits are of limited duration, and because they are not available for former employees of failed businesses, and because the premium payments are shifted from the employer to the now-unemployed former employee, they are an inadequate solution to the problem. COBRA benefits are very expensive and are considered by many to be unaffordable for our government considering our tight budgetary constraints. At best, federal assistance will be only partial, leaving the unemployed with a very large bill for health insurance premiums, which in turn means that they will remain unaffordable for most of those who have lost their incomes.
Although we must support congressional efforts to shore up the COBRA program, we must likewise recognize the severe inadequacies of these proposals. Inevitably, much of the imperative costs will be shifted to public programs such as Medicaid, while many simply will be deprived of essential health care services. Once again, it is abundantly clear that it would be much more rational, equitable, and humane to enact a program of publicly administered, universal health care coverage. The need is more urgent than ever.
Gail Shearer and Susanna Montezemolo of Consumers Union have prepared an excellent report on this topic, "A Pink Slip Away... Why Congress Should Subsidize Health Insurance Coverage for Laid-Off Workers." The report is available at:
<http://www.consumersunion.org/health/cobra/cobra.htm>http://www.consumersunion.org/health/cobra/cobra.htm