Senate Finance Committee Chair Expects Economic Stimulus Bill Will Include Subsidies To Help Laid-Off Workers Retain Health Coverage Under COBRA

Main Category: Health Insurance / Medical Insurance
Article Date: 08 Jan 2009 - 1:00 PDT

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Senate Finance Committee Chair Max Baucus (D-Mont.) on Tuesday said that the economic stimulus package likely will include subsidies to help recently laid-off workers pay to retain their health insurance through COBRA, the Boston Globe reports (Wangsness, Boston Globe, 1/7).

COBRA -- which allows recently laid-off workers to retain their group health insurance for as long as 18 months, provided that they pay the full cost of the premiums -- on average costs such workers 84% of their unemployment benefits, according to a report scheduled for release on Friday by Families USA. David Lemmon, a spokesperson for Families USA, said that the group has provided copies of the report to Baucus and the transition team of President-elect Barack Obama (Clarke, CQ Today, 1/6). According to Senate Democratic aides, the Congressional Budget Office has not determined the cost of the COBRA subsidies, and the percentage of the premiums that the subsidies would cover also remains undetermined (Boston Globe, 1/7). The COBRA subsidies would expire after two years, aides said (Weisman, Wall Street Journal, 1/7).

Aides said that the COBRA subsidies will account for part of the estimated $100 billion included in the stimulus package for health care provisions (Boston Globe, 1/7). Other health care provisions in the stimulus package likely will include an increase in federal Medicaid funds for states, an investment in health care information technology, and funds for medical research, prevention programs and community health centers (Frates, The Politico, 1/6). In addition, Obama has proposed a provision in the stimulus package that would allow workers who lose jobs that did not include health insurance to apply for Medicaid (Wall Street Journal, 1/7).

The Senate Finance Committee plans to hold a closed meeting Thursday to determine the level of support for health care and other provisions in the stimulus package (Rogers, The Politico, 1/7). Congressional committees likely will begin to hold hearings and markup sessions on the stimulus package as early as next week (CQ Today, 1/6).

Comments
In a statement, Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) said of the COBRA subsidies, "Congress has a responsibility to help the victims of this crisis keep their health insurance even when they lose their jobs," adding, "The stimulus needs to include both job support and health support." Senate Budget Committee ranking member Judd Gregg (R-N.H.) said that he might support the COBRA subsidies, provided that they remain temporary (Boston Globe, 1/7).

However, House Budget Committee ranking member Paul Ryan (R-Wis.) said that the COBRA subsidies and additional federal Medicaid funds for states "aren't stimulus" and amount to "ideological accomplishments in the guise of economic stimulus" (Wall Street Journal, 1/7).

Health Care Groups Seek Additional Medicaid Funds
In related news, a coalition of patient, hospital, physician and nursing home groups on Tuesday sent a letter to lawmakers asking for more than $125 billion in additional federal Medicaid funds for states, CQ HealthBeat reports.

The groups said that the stimulus bill should link matching funds to local government contributions to the portion of Medicaid funded by states, as well as "a robust maintenance of effort to protect against adverse changes in eligibility, benefits, provider payments or access to care."

The groups that signed the letter included the American Academy of Pediatrics, the American Hospital Association, the American Academy of Family Physicians, the American Health Care Association and the National Association for Home Care and Hospice (Reichard, CQ HealthBeat, 1/6).

Opinion Piece
"As with the practice of medicine, the application of economic stimulus is as much art as it is science," and "it's imperative to get a clear idea of how proposals for new spending on health care" and other provisions "would work and why they should be part of this package," Washington Post columnist Ruth Marcus writes.

She writes, "Much of what the Obama team proposes is more -- much more -- of the same," such as "giving states extra money for Medicaid," adding, "By contrast, launching a new 'green energy' plan or a program to computerize health records, is a newer, more complicated endeavor, one that calls for more consideration than up-or-down vote on the floor." According to Marcus, "It is incumbent on Obama's advisers to explain how these programs would contribute to the recovery." In addition, lawmakers "need to consider whether they are passing a temporary stimulus or paving the way for permanent spending," according to Marcus.

She writes, "The next several weeks will be a test, for the new Congress as much as for the new administration," because the nation "cannot afford a 111th Congress as gridlocked as the 110th," adding, "Nor should it settle for a rubber-stamp Democratic Congress doing the bidding of the new Democratic president" (Marcus, Washington Post, 1/7).

Broadcast Coverage
NBC's "Nightly News" on Tuesday reported on efforts to overhaul the U.S. health care system amid a worsening economy, as well as health care provisions expected to be included in the stimulus bill. The segment includes comments from Kaiser Family Foundation President and CEO Drew Altman; Karen Ignagni, president and CEO of America's Health Insurance Plans; Obama; and Ron Pollack, executive director of Families USA. The segment is part of a series of special reports titled "America's Agenda" (Bazell, "Nightly News," NBC, 1/6).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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