One of the joys of our system of employer-provided health insurance is that the odds are pretty good that if you lose your job, you'll also lose your health insurance.
Well, you can continue your coverage with COBRA, but relatively few workers who have just lost their job can afford to pay 102 percent of their premiums for an extended period of time. The average COBRA payment eats up something like half of the average unemployment insurance benefit.
If you're young and healthy, you might be able to buy an individual plan for less than your COBRA payments, especially if you're willing to accept a high deductible and hope you don't get sick. If you have children, they might qualify for public insurance, through SCHIP or Medicaid, but unless you were seriously living paycheck to paycheck and have no assets, you probably won't qualify.
The Economic Recovery bills moving through Congress attempt to deal with this problem in a couple of different ways:
- it would provide a federal subsidy for part of the cost of COBRA payments
- it would extend how long you could continue to participate in your former employer's plan if you were within 10 years of qualifying for Medicare, or had worked for your old employer for at least 10 years.
- At least on the House side (it may be in the Senate bill too, but I haven't found it), it would let states cover workers receiving unemployment benefits under Medicaid, without regard to income or assets.
I'm not an expert on health care policy, but this strikes me as a bit of a kludged together package. For one thing, it leaves out the 60 percent of unemployed workers who don't qualify for unemployment insurance, most of whom probably didn't get employer-provided benefits in the first place, and so can't get COBRA either. For another, COBRA is a pretty expensive way to cover people -- Medicaid is lot cheaper.
I'm not really objecting to the proposal -- it's better than doing nothing, and I recognize that health care reform isn't likely to happen in the next month. But this really isn't a substitute for doing health care reform for real.