Monday, January 26, 2009

Laid-Off Workers to get Help with Health Insurance

Plan aids jobless with health costs
Posted by Stephen Mills; Group1a

By Julie Appleby, USA TODAY
Laid-off workers could get help with health insurance through the stimulus package under debate in Congress.
States would receive federal funds to open Medicaid health programs to the unemployed. And workers laid off between Sept. 1, 2008, and Dec. 31, 2009, could qualify for help paying 65% of the cost of keeping coverage under their former employers' insurance.

Under current law, many workers who lose their jobs can stay on their employers' health insurance for 18 months — if they can afford to pay the full tab plus a 2% administrative charge ..

The stimulus plan would helpworkers pay for that coveragewith temporary subsidies — 12 months under the House version and nine months under the Senate's .

"A subsidy is critically important," says Ron Pollack head of advocacy group Families USA, which says premiums can equal 84% of the average unemployment check.

The stimulus package also allows workers 55 and older and those with at least 10 years at an employer to extend coverage under their former employers' insurance at their own expense until they reach Medicare age or get other jobs.

"They're taking the opportunity of a fast-moving stimulus package to make a very big change in health policy," says economist Paul Ginsburg of the Center for Studying Health System Change, a non-partisan research group.

Employers object to that extension, saying it would raise their costs.That's because workers who retain coverage are likely to be older or sicker than those who seek other insurance, says Peter Lee, of the Pacific Business Group on Health, a business coalition.

About 9% of workers eligible for coverage through the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) enroll, according to a recent Commonwealth Fund study. The law applies to firms with 20 or more workers.

Still, the COBRA subsidy and letting workers stay on their former plans until Medicare age could help some, says Karen Davis, president of the Commonwealth Fund.

"Not having COBRA expire at 18 months could be an important bridge (to Medicare) for older adults," Davis says

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