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Giving COBRA some fangs would help ease the bite of unemployment

Submitted by on Friday, 9 January 2009 4 Comments

I took a gamble and won, which is odd for me. I’m usually so unlucky I haven’t come out ahead on so much as a lottery ticket in close to a decade.

We decided in November to skip buying health insurance through COBRA. That stands for Consolidated Omnibus Reconciliation Act, and it’s the legislation that lets workers continue coverage for a year and a half after leaving their jobs. They have to pick up the full tab, though.

I had a better deal. My former employer would continue to pay the company’s share for three months, cutting my tab roughly in half, to $600 a month.

I knew Big Guy’s asthma medications would come to roughly $200 a month. What were the chances that we’d spend an additional $400? Not very high, unless someone had an accident, a serious illness or an asthma or allergy attack that sent him to the hospital. That “unless” moved the chances to “medium.”

I rolled the dice anyway, because saving $800 in a job market that’s shaky at best in my profession was attractive. It worked. We became insured again Monday when Dad started his new job.

It worked, though, largely because of luck. I wouldn’t have felt nearly as comfortable — or, maybe I should say, I would have felt more uncomfortable relying on luck had I not known we would be out of the weeds in two months.

According to the Boston Globe, there’s a plan to prevent more Americans from having to rely on luck. The ranking Democrat on the U.S. Senate Finance Committee says help with COBRA payments for two years will be included in the economic stimulus package.

COBRA payments average $1,000 a month for an American family — that’s 84 percent of the average unemployment benefit, according to a report the nonprofit organization Families USA is releasing today. Clearly, the math doesn’t work out on that.

There is, of course, the predictable opposition.

“Those aren’t stimulus,” Rep. Paul Ryan of Wisconsin, the ranking Republican on the House Budget Committee, told the Wall Street Journal. “Those are ideological accomplishments in the guise of economic stimulus.”

He’s right that it’s not stimulus. It’s bailout for a group that hasn’t seem much help as the result of federal largess thus far: the average worker.

Let’s ignore for a minute that it’s the humanitarian thing to do in a country shedding more than a half million jobs a month and where experts think the unemployment rate could top 10 percent. Let’s forget that giving people a way to pay for preventative care and maintenance medication will save costs down the road.

If we start talking like that, people will label this as just another handout from illogical bleeding-heart liberals who think with their emotions instead of their wallets.

Let’s look at other financial impacts of not doing this.

Hospitals from Pennsylvania to California already are struggling under the weight of caring for the uninsured. Some already have filed for bankruptcy.

A report this week by PricewaterhouseCoopers predicts hospitals nationwide will see bad debt rise this year and also rely more on payments from government-funded programs and less on private insurance. And this at a time when states are cutting programs as they struggle budgets.

Maybe viewing it in those terms will help people like Ryan see it from the perspective of their business constituency instead of looking it from the viewpoint of people who would never vote for them anyway.

Because we wouldn’t want to do anything to help folks this “downturn” has stomped the hardest: People who increasingly choose luck as health insurance in the face of an alternative that’s unaffordable.

Copyright 2009 Debra Legg. All rights reserved.

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  • Vanilla Cokehead said:

    COBRA’s a damned joke, mainly because of the cost. Another argument for universal health care in the US.

    The premiums for health insurance when some private insurers have their state-mandated “open enrollment” tend to be a joke, too. Some charge five-figures for yearly premiums to individuals…

  • Single Mom Claire said:

    I had to leave my job due to health issues in 2007 and have been on Cobra ever since. I pay $350 a month for just me to be covered, just medical. It will be expiring in Nov of this year then no other insurance co will cover me because I have a terminal illness. Medicade is even on the fence about covering me. What am I supost to do?? My medical costs alone reach the thousands monthly and that is WITH insurance. I have bill collectors calling me all the time due to unpaid hospital bills. Seriously if I had the money I would pay them but disability does not pay enough to support myself and my child and pay for the 100+ medications that I take on a daily basis. I am 29 years old and have a 3 yo daughter. I think the health care system and Cobra SUCK! I think disability SUCKS and I wish that someone would do something about it. Why make people struggle like then when they should not have to?

  • Debra said:

    Vanilla: You’re absolutely right about the joke that is COBRA. I’ve never COBRA’ed. Never even been tempted ’til this time, because it’s so godawful expensive. I honestly can’t think of a situation where many folks would COBRA, except possibly if you left a job to start your own business and had other things to handle besides shopping around for a group rate. Otherwise, useless.

    Claire: Your situation demonstrates a lot of what’s wrong with social services in this country. Seems the system is at times so hellbent on not trusting people that it sets up traps for the innocent.

    Sure, people abuse the system. I know one man who lives no more than two blocks from a hospital but at times will call an ambulance in non-life-threatening situations just because he can and just because he doesn’t have to pay for it. And it burns me up.

    But punish him and folks like him, not everyone else. And I bet more folks fall into the “everyone else” catagory.