JONATHAN COHN AUGUST 31, 2011
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Some Americans who lost their jobs in the recession are about to lose something else: Their access to affordable health insurance. And it's thanks to the same backwards thinking that's preventing broader action to boost the economy.
Ever since February, 2009, the federal government has been subsidizing COBRA premiums. COBRA is the program that allows people to keep their job-based insurance even when they lose their jobs. The premiums tend to be very expensive, particularly for people out of work, so the subsidies make a big difference.
Phil Galewitz, of Kaiser Health News, explains:
Studies vary on just how many people were helped. Hewitt, an employee benefits consulting firm, reported in 2009 that COBRA enrollments had doubled, from 19 percent of eligible individuals to nearly 40 percent. In contrast, Ceridian, which administers the COBRA benefit for many employers, found that COBRA enrollment increased from 12.4 percent to 17.7 percent.
The Treasury Department last year reported that up to a third of eligible unemployed workers took advantage of the subsidy—helping as many as 2 million households at a cost of $2 billion in 2009. But the nonpartisan Employee Benefit Research Institute questioned that figure, suggesting it was likely inflated because employers may have counted the same worker twice.
What is not disputed is that the COBRA subsidy made a big difference in the price of coverage. The average price for family coverage is about $1,137 a month, according to the Kaiser Family Foundation. With the subsidy, COBRA coverage costs an average of $398.
Offering COBRA subsidies, like extending unemployment insurance, is the kind of anti-recessionary action lawmakers once undertook without hesitation. And when the initial subsidy program was set to expire, Congress renewed it through the middle of 2010. But while yet another renewal had support from both President Obama and key Democratic leaders, including then-Speaker Pelosi, Republicans and some conservative Democrats opposed it because it would increase the deficit.
And that's true: It would have increased the deficit by several billion dollars, depending on the length of the extension, although centrists and conservatives showed no enthusiasm for proposals that would have offset the cost with other spending cuts or tax increases. But even if extending COBRA would have increased the deficit, it would have been money well spent -- providing a (very very) mild boost to the economy while making it easier for people to get health care. As a recent Commonwealth Fund study demonstrated, people who lost insurance during the downturn have been much more likely to postpone or skip recommended medical treatments.
Of course, this is becoming an old story. Millions of Americans are struggling. And Congress, in the name of austerity, is doing its very best not to help them.
Note: This shouldn't be such a problem after 2014, once the Affordable Care Act takes effect. That law will make it possible for the unemployed to get affordable, comprehensive insurance with subsidies for those who need them.
16 comments
We spend $10's of billions a month fighting wars to maybe help improve the quality of life in other countries, but we can't spare an extra $2 billion a year to help out our own people. Sad.
- GSpinks
August 31, 2011 at 11:48am
Indeed, GSpinks. One of my favorite quotes: "Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron." - Dwight Eisenhower
- tealeaves
August 31, 2011 at 1:14pm
This is a brilliant Republican plan to solve poverty and unemployment. Hope they all die from treatable and preventable diseases. After all, if you get sick and die it is your own fault otherwise Jeebus wouldn't let you get sick and die.
- blackton
August 31, 2011 at 1:31pm
Eisenhower wouldn't recognize today's GOP. As a true warrior he also warned up about the military-industrial complex. No one listened, especially what came next in the GOP. When I read articles like the one above I get angry and sick both at the slimebag GOP and the supposed head honcho in the white house. And Blackie, the pube line of reasoning is if you're a good person and saved Jesus will take care of you. Never mind the bad things that happen to good people.
- tmmats
August 31, 2011 at 2:30pm
"And Congress, in the name of austerity, is doing its very best not to help them." Which party in Congress is more at fault? Oligarchist Republicans or chickenshit Democrats? How about the chickenshit Democratic president? It's a no-brainer of a message to take to the people: the Republicans have denied health coverage to millions of struggling Americans in order to secure tax breaks for billionaires. Say it today, say it tomorrow and say it again the day after that. And yet do we hear one single solitary peep out of Obama? Of course, you are exactly right about this COBRA issue, Mr. Cohn, but you should acknowledge that your spot-on critique is not consistent with your apologies for the current administration.
- AaronW
September 1, 2011 at 1:25am
In light of the new reports about the waste/fraud/abuse to the tune of over $60B in Afghanistan/Iraq, spending more in those hell holes while f**king the American public is plain treasonous. There's always easy to find money for killing abroad and rampant waste there is something no one cares about. I guess it's cheap to kill at home since all you do is not spend it here.
- tmmats
September 1, 2011 at 10:19am
JC quotes: "The Treasury Department last year reported that up to a third of eligible unemployed workers took advantage of the subsidy—helping as many as 2 million households at a cost of $2 billion in 2009. " OK, so if it helped 2M people at a cost of $2B dollars, the average person received $1,000 in assistance. At $1300/month for insurance, this means the average person received 23 days of insurance coverage from the subsidy. Yawn. Of course, we just lost $535M that went to a single green energy investment in a company called Solyndra. The tax payers have an empty manufacturing plant in San Jose to show for this. Maybe we shoudl have taken a bunch of the green energy investments that went bust and spend those on health care? Episodes such as this health care subsidy aren't at all an example of cruelty. Instead, they are an example of budgeting decisions families and businesses make every day. We're broke. I'll bet you dollars to donuts that many of the companies that skipped on purchasing COBRA insurance kept their cable TV and cellphone, went out to dinner a few times that month, bought cigarettes, etc. Priorities. Priorities.
- seattleeng
September 1, 2011 at 11:40am
seattle says with no irony "I'll bet you dollars to donuts that many of the companies that skipped on purchasing COBRA insurance kept their cable TV and cellphone, went out to dinner a few times that month, bought cigarettes, etc." I suppose you meant "individuals" but then since companies are "people" now maybe that wasn't a freudian slip. As some one who once had to use COBRA let me give you a simple breakdown. Basic unemployment insurance typically means about $1400/month. So let's see. After paying rent (average in the DC metro area for a 1-bedroom is $800) that leaves $600 for other expenses - like car insurance, groceries, utilities, minimum credit card payments and student loan obligations. Most people can't afford the COBRA insurance even with the subsidy. In my case, when I did have it, I had COBRA for one month and it was $495 for 1 person. Thankfully I was still single. Seattle seems to think people get a $1000 check from the Feds to pay for COBRA. Not. At least I never saw a check and certainly didn't benefit from any subsidy. The only thing the month of COBRA did was give me a 30-day extension of my basic employer provided insurance and a small window of opportunity to find a new job before I had a lapse in coverage and enter into that "6-month purgatory" that insurance providers put on new employees without continuous coverage. I'm not saying the $2B is a waste but as others have pointed out, our priorities in subsidizing industries that have no positive impact on the world we live in, illustrates that we've allowed the government, the politicians and the industries they serve to continue to fuck the American tax-paying public. Instead Seattle focuses on failed green energy investments at $535M as a reason to cut social services while showing a blatant disregard for the $323 Billion the U.S. will spend on the F-35 fighter jets. If Seattle and other fake deficit hawks and fake fiscal conservatives wants to get real about balancing the budget, let's start with immediate cuts to our military industrial complex of 75% right off the bat. We'll still be spending more than the world combined and we could, actually reinvest that money into real things we need. http://www.rickety.us/2011/06/2010-defense-spending-by-country/
- singlspeed
September 1, 2011 at 1:08pm
I'll bet you doughnuts to dollars that many more of those people chose between paying electric, gas and groceries, put fuel in the car so they could drive to interviews, rent/mortgage to keep a roof over their head, clean clothes, relatively healthy meals for their children, etc.
Priorities, indeed.
- GSpinks
September 1, 2011 at 1:14pm
Oh, and let us NOT forget that people receiving unemployment compensation have to pay federal taxes on that money. And UC is typically capped at 40-50% of your full-time weekly earnings for about 26 weeks. So you're "earning" half of what you had been, and paying the same level of income tax (which you typically have to do yourself in the form of estimated payments). BTW, COBRA for a single, healthy, white male in his 20's costs about as much as the mortgage on a $200k house. So if they skip COBRA to be able to have the money they need to pay the bills they must, and want to spend their last $10 for the week on some McD's or something, I won't hold it against them.
Your general assumption of moral superiority explains well your "position" on so many issues, seattle. Like I said before, just stop trying to pretend you're a good person, because you aren't.
- GSpinks
September 1, 2011 at 1:23pm
singlespd writes: "If Seattle and other fake deficit hawks and fake fiscal conservatives wants to get real about balancing the budget, let's start with immediate cuts to our military industrial complex of 75% right off the bat." Remember that the military is the greatest social program the US has ever had. Wiki notes: Total military budget $685B: 1) Personnel (salaries for soldiers): $154B 2) R&D (salaries for engineers): $80B 3) Construction (salaries for construction workers): $24B 4) Procurement (buying stuff from US companies): $140B Wowza. That's like $400B that is paying people to do stuff. How can you NOT like the military? The military funds things like the development of GPS (google maps on your cellphone, E911), OFDM (the modulation scheme for modern 4G cellular systems), CDMA (the modulation scheme for present cellular systems, UAV (which today stabilize airplanes, but in the future will stabilize and drive your car). All good stuff. :)
- seattleeng
September 1, 2011 at 11:54pm
GSpinks writes: "I'll bet you doughnuts to dollars that many more of those people chose between paying electric, gas and groceries, put fuel in the car so they could drive to interviews, rent/mortgage to keep a roof over their head, clean clothes, relatively healthy meals for their children, etc." True enough. But remember that about some 40% of poor people smoke. 1.5 packs per day. It's $9 per pack. That's 45 packs per month. Almost half of our poor families are spending almost $500/month on cigarettes. 50 years ago, the definition of "poor" was set to capture those that were truly not getting enough calories in a day. Today, our poor people have a long list of stuff millionaires didn't have 30 years ago. And they are fatter than ever. And they smoke like chimneys. The people in this world that are truly poor would fall over laughing at our definition of poor. Now, what we can probably agree on is this: If it is a millionaire that will be footing the bill to pull up our poor--even those that smoke--then no harm no foul. Let's take his money. But let me ask you this: Consider the guy earning $60K/year. How much of his money do you want to take to help the poor family?
- seattleeng
September 2, 2011 at 12:09am
How can you NOT like the military? Seattle... I think you read past my point. It isn't the fact that the money is spent on technological "achievements" but I find that you think spending for military is the only good sort of social spending we should be doing. Quite frankly, I don't think we need to spending billions of dollars developing future weapons systems which the only goal is to further destruction. Why not use the bright boys of DARPA into creating actual solutions that would be a positive benefit. Instead of developing yet another pork-project like the F35, why not put that money to good use actually cleaning up the environment? Putting those engineers to work on technologies that would have direct benefits to the public & private sectors? It's funny that you snark at green technology investments by Obama but you don't mention that the Pentagon is putting a lot of tax-payer money into off-grid/sustainable technologies for bases. Why is that acceptable for the military but applying that amount of money into the non-military public & private realms is a waste and liberal/hippie thinking gone wrong? The state of military spending as it existing right now is solely for its own benefit and the continued feed-trough mentality of the military contractors. It isn't a reflection of actual defense needs or threat realities. If we included the actual cost of the military and included the soft-cost benefits like housing stipends, medical care, etc. then the cost of the military balloons to close to a trillion a year. Maybe we should all become military welfare-queens since the perception among some in the crowd is they're the only "real" government jobs worth having around.
- singlspeed
September 2, 2011 at 12:57pm
I would contest all those numbers. Here in WV it's $3 a pack for the cheap stuff, $6 for the premium brands. Or, you can buy a pound of tobacco and some papers for $15-20 and roll 10 packs worth, making it about $1.50-2.00 a day. So, in reality, it's like $50 - $100 per month, or just only smoking when they can afford a pack, or quitting depending on the person. I've known people in each of these categories. Yeah, tobacco may be more expensive in states like NY but the same basic rules apply. Suffice it to say, I've never known anyone to go without important things so they could buy smokes.
The only difference with the poor of today is that we have social programs to keep them from actually starving or freezing to death, or dying to a treatable illness. At least until Republicans take over and the Tea Party Terrorists reign supreme. Then God help us all.
As for our poor, that's why we established all of these wonderful little programs. All we have to do is eliminate social security, welfare, WIC, and any other program the Tea Party hates, then we can be just like all your precious little third world countries. That is what you want, after all, right? Why should we be exceptional if we can't make the whole world exceptional? Why should our well-to-do support our poor if they can't support the world's poor, right?
BS
- GSpinks
September 2, 2011 at 1:52pm
GSPinks, NPR reports the price for cigs in NYC is $11 in 2010. WA state is $9.89. Hawaii is $9.73. Tennessee is the lowest on the list at $5.56. The fact is, anyone that is smoking at receiving welfare is wasting my and your money. And since smoking is overwhelming a vice of the poor...that's a lot of money being wasted. You didn't answer my question about helping the poor: How much would you tax a guy earning $60K to help the poor? What is fair for him to pay? www.publicradio.org/columns/marketplace/business-news-briefs/2010/06/a_new_york_city_pack_of_cigare.html www.theawl.com/2011/06/what-a-pack-of-cigarettes-costs-state-by-state don't eat the link. don't eat the link. don't eat the link. don't eat the link. don't eat the link. don't eat the link. don't eat the link.
- seattleeng
September 2, 2011 at 4:43pm
singlespeed writes: "Quite frankly, I don't think we need to spending billions of dollars developing future weapons systems which the only goal is to further destruction" But military spending is like spending to cure AIDS. Some (like my grandparents) viewed spending on AIDS as a way to help "the gays" continue their lifestyle. In fact it's not. AIDS research has brought us enormous amounts of knowledge about the human immunodefense system that helps us in a wide range of areas, even cancer and Alzheimer's. That's why we need to look at the entire picture. Similarly, military spending initially serves to find ways to kill (or heal) more efficiently, but the secondary impact of all that research then finds its ways into every aspect of consumer life. Everything from jet engines to cell phones to artificial blood and rapid clotting agents and prothesis to the internet were helped along in some way by military spending. Now, that's not to say they'd never have been invented. But they would have come later. The government does a very good job when its asked to serve as an oversee-er of an XPrize type goal. That is, the government takes a pile of money, and then asks industry to meet some goals, and awards money to those that best meet the goals. That is how we've essentially developed military hardware for 50+ years, thought not as openly as a normal XPrize. I've noted before, the best thing Bush could have done on 9/12 was to say "No more screwing around. There is an immediate $0.10/gallon on gasoline, adn that will be used to fund alt energy proposals and get us off oil. The DoE will be publishing milestone guidelines, and the companies that get us there the quickest will be awarded billions...." What a missed opportunity. Yeah, there was the Freedom Car, but the rewards were too small. I contrast that too to what Obama did with the stimulus, where they went out and tried to pick winners. Of course, the government will never succeed in that role.
- seattleeng
September 2, 2011 at 4:58pm