"Unemployed, But Not Uninsured" - A Winner for Congressional Dems

[CorpGovActivist]

The Democrats in control of Congress should revist some of their best healthcare expansion bills from recent Congresses: http://thomas.loc.gov/home/multicongress/multicongress.html

One variation on a theme that would be a real winner for the Reid/Pelosi leadership team?

"Unemployed, But Not Uninsured!"

The basic idea?

Re-write Medicaid to require that states pay the monthly COBRA premiums of applicants for unemployment benefits who are eligible for COBRA coverage through their former employers' private group plan. COBRA eligibility usually lasts 18 months (longer in some cases): http://www.dol.gov/ebsa/faqs/faq_consumer_cobra.html

The cost savings to the states and Federal government would be substantial (especially for newly-unemployed workers with large monthly medical/prescription drug costs). It is far more cost-effective to spend a fraction of the cost to keep the newly-unemployed worker on his/her private group plan, than to incur the full freight of his/her medical costs through Medicaid.

By keeping these newly-unemployed workers and their families/minor dependents covered, society would be providing a more stable launching point for the breadwinner to re-enter the workforce.

Ironically, insurance companies would probably support this, as it would increase the percentage of eligible COBRA participants who would/could actually elect coverage.

As with most public policy, I'm sure there are unforeseen downsides.

But can you imagine the outcry if Shrubya were to veto?

- Dave

[sandnsea]

1. That, and/or

rewrite Medicaid to provide premium assistance on a sliding fee basis to anybody who qualifies.

[CorpGovActivist]

2. Boomer Parents on Adult Children's Group Plans

If you want to get really radical, how about letting aging baby boomers be listed as dependents on one of their adult working children's group plans?

- Dave

[jmowreader]

3. The states would rather have them on Medicaid

COBRA coverage is unbelievably expensive. I've heard $500-$600 per month for people with no chronic conditions. COBRA doesn't require the former employer to pay the "employer's share" of the worker's premium.

Let's throw out a couple of numbers...a plant with 675 employees closes. (That number's not pulled out of the air--it's how many people lost their jobs when Black & Decker closed the Fayetteville, NC, power tool plant.) Assume they all had medical coverage. If their COBRA premiums were $550/month andthe average worker stayed unemployed for a year while retraining for a new job, the state of North Carolina would have to come up with $4.455 million it doesn't have to keep them off Medicaid.

If we tried introducing a bill like this, fifty governors would be parked outside Shrub's office door begging him to veto it.

[CorpGovActivist]

4. Good Hypothetical

"...the state of North Carolina would have to come up with $4.455 million it doesn't have to keep them off Medicaid"

Medicaid funds would be used to pay the premiums. With 675 workers, and an average of 3 covered people per worker (the worker, a spouse, one child), that comes to 2025 people. How many of them would have to have a major illness (e.g., cancer) during that year, for the outlays to break even?

Then, factor in the quality of care on private insurance versus Medicaid. If one of those workers' lives is saved as a result of superior care, then what benefit does the state reap from his/her continuing gainful employment/tax paying upon return to work?

I don't know the answers, but when doing this kind of cost-benefit analysis (something that a whole GAO team would have to do), it is useful to look at secondary and tertiary costs and benefits, too.

I guess if it were a very cold, calculated math problem, the question under this hypothetical would be: would NC spend < or > than $4.455 million on those 2025 residents in the year?

Maybe offsetting only part of the premium, up to a cap, and/or means-testing, would help?

Two other idea: (1) create COBRA premium insurance plans, which would allow laid-off workers' premiums to be paid; (2) allow workers to use any unspent FSA money to pay COBRA premiums, even after separation from service, as an exception to the "use it or lose it" provision.

- Dave