Billions for health care insurance

COBRA time limit raised, costs cut in Obama plan

February 1, 2009 

WASHINGTON -- It will get vastly cheaper for most people to keep health insurance after losing a job if the government's stimulus plan becomes law. Some nickel-and-dime cuts in health coverage for the poor will be reversed, too. Geek jobs in medicine will grow.

The billions to be poured into health care from the economic stimulus package will do little if anything about the chronic conditions behind the nation's stubbornly large ranks of uninsured. Instead the plan is a temporary lifeline, hasty measures for nearly desperate times.

Jobs aren't the central point of the package sought by President Barack Obama, passed by the House and steered to the Senate. The point is to cushion the blow from losing one.

For those who qualify, relief would be substantial.

Under a dramatic, temporary expansion of the Consolidated Omnibus Budget Reconciliation Act, the law that lets the unemployed keep health insurance from their old job for up to 18 months if they pay for it in full, costs would drop by about two-thirds for a year.

Moreover, people who lose a job they've had for 10 years could stay on COBRA at their expense all the way to age 65, when Medicare takes over, if they don't get another job with insurance first.

People 55 and older could do the same without meeting the 10-year requirement.

It's so expensive for people to extend that insurance now that many don't do it. It can quickly eat up a majority of unemployment benefits.

That's just one of the steps to maintain health access in the worst economic conditions Americans have lived through in generations. And that's the key -- maintenance more than advancement.

People who lose jobs at businesses that employ fewer than 20 people don't qualify for COBRA. For them, the government would bring many more jobless people under Medicaid's wing. The feds would pay for this, plus give states much more money to run the cost-shared part of the program.

In return, states taking the extra money would have to back down on some of the cuts they've made to the program recently.

$40 billion subsidy

Altogether it's a pricey lifeline: $40 billion to subsidize health insurance for the unemployed and more than twice that for Medicaid support.

Budget hawks, whose voices are practically lost in the wind these days, wonder whether the relief really will be temporary.

They know it's politically tough for the government to take something back once people get a taste of it.

Witness the expiring tax cuts that former President George W. Bush won from Congress. Obama promised to continue most of those cuts and raise taxes on the rich. But with the recession so deep, it's less likely he'll seek to raise those tax rates after all.

The recovery plan also sets aside $20 billion for medical record-keeping, a sum likely to increase the number of information technology jobs.

Converting to digital

Four in five doctors still rely on old-fashioned paper files.

Digital records are bound to cut administrative costs and improve care by making it easy to share patient information. But conversion is a huge task, for which Obama wants to spend $50 billion over five years.

The economic recovery plan isn't the only game in town when it comes to health care, although it's the most expensive.

The Senate has voted to extend government-sponsored health insurance to about 4 million of the estimated 9 million uninsured children. The House acts on that next.

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