by Andrew Coates MD
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.
To keep family coverage under COBRA, with the subsidy, it will cost people
who are laid off, on average, almost 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.
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.
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 almost 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 why Congress should shovel our money
into an industry that pits its profits against our health, with a program
that holds almost 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, and create millions of new jobs. It would mean
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, and allow unions to get back to
bargaining for wages and working conditions instead fighting over reduced
benefit levels, bigger premiums, more co-pays and deductibles. Everyone
would be relieved from the worry about health coverage that now comes with
the loss of a job.
Now that would be a stimulus! We really need single payer national health
Andrew Coates MD works on the staff of a state hospital near Albany, NY
He is a member of the Professional Employees Federation (PEF) a joint
statewide affiliate of AFT and SEIU.