With the economy contracting and unemployment rising, Americans who receive health insurance through their job will potentially find themselves without coverage. Luckily there’s Cobra (Consolidated Omnibus Budget Reconciliation Act), which let’s you stay enrolled in your employer’s health plan if you pay the entire premium plus a 2% administrative fee.
Unfortunately, you can only stay on Cobra for 18 months, and according The Commonwealth Fund (release here), only 9% of unemployed workers actually took advantage of Cobra in 2006. Most people simply can’t afford to pay the entire healthcare premium without a paycheck.
The Obama economic stimulus package (passed by the House and ready for debate in the Senate ) would help. The package would subsidize 65% of Cobra premiums for up to a year, meaning the unemployed would have to kick in just 35%. The plan would also allow those over age 55 (or with more than 10 years on the job) to stay on Cobra until they qualify for Medicare at age 65. Finally, it would make Medicaid available to the unemployed on temporary basis.
This plan is good for people. It’s also good for the health insurance industry, which faces potential membership falloffs as unemployment rates rise. America’s Health Insurance Plans is behind the effort (see statement here). So are we.