Safety Net for Uninsured ‘Straining’ as Layoffs Increase

The New York Times today looks at how the declining economy is putting more Americans at risk of losing their health insurance, and how Democrats and Republicans differ on the best way to help the recently uninsured maintain coverage. As the number of layoffs increase in the wake of the Sept. 11 attacks on the World Trade Center and the Pentagon and the overall economic slump, more people are turning to the health safety net for support. But state officials and health advocates say that Medicaid "is under increasing strain" due to declining tax revenues, rising health care costs and increasing caseloads. Most people who have been laid off have the option of continuing their employer-sponsored coverage through the 1986 Consolidated Omnibus Budget Reconciliation Act by paying the full cost of their premium. But the high cost of a premium -- up to $600 a month for family coverage, according to the Kaiser Family Foundation -- puts COBRA out of reach for many people. Accordingly, the burden on Medicaid and the Children's Health Insurance Program is likely to grow if the current economic decline becomes a full-fledged recession. According to Families USA, more than 50% of workers who lost their jobs became uninsured during the last recession in 1990-1992.

The issue of health care for the unemployed is currently being debated in the Senate as part of the economic stimulus package, and while both parties agree that the federal government should help laid-off workers retain coverage, they disagree on the best way to do so. Democrats have proposed $9 billion in funding to cover 75% of COBRA premiums for workers who lost their jobs after Sept. 11, $5 billion to increase the federal contribution to Medicaid and an additional $3 billion for "states that want to help unemployed workers not otherwise eligible for assistance with coverage." Republicans, however, say that this plan is too expensive, "not focused on the neediest Americans" and could create a new entitlement. The Republican-backed stimulus package passed by the House (HR 3090) contains $3 billion in health care grants to states to use in the best way they see fit. Democrats have said that Republicans are "more concerned about rewarding big corporations with tax cuts than helping the unemployed." What eventually may occur, according to Harvard University health expert Robert Blendon, is that the "intense anxiety" prompted by the loss of health coverage may "spar[k]" debate about universal health coverage, similar to the downturn in 1990-92. Blendon said, "I think we'll see the issue re-emerge. Like '92, we have premiums going up, people losing jobs, people losing health insurance who traditionally thought they had it, and people finding no real safety net of coverage" (Toner, New York Times, 11/12).