Out of the $825 billion House version of the proposed economic stimulus package, $157 billion is tagged for health care. But roughly 75 percent of that spending really does nothing for the uninsured. Rather, it goes to projects like:
- $20 billion to improve health information technology (HIT);
- $1 billion for the Agency for Healthcare Research and Quality to create a comparative effectiveness research program that’s supposed to compare different medical devices, prescription drugs and specified medical procedures to see which are the most effective, including the issue of cost;
- $2 billion for renovations at NIH facilities and new agency research grants and $1.5 billion for renovations at university laboratories that conduct research sponsored by the agency;
There is $30 billion to help workers losing their jobs pay their COBRA premiums, but is that a good thing?
COBRA (Consolidated Omnibus Budget Reconciliation Act) allows employees working for companies with 20 or more employees to continue their health insurance (if the company offers it) in most cases for up to 18 months after they leave their job. However, employees must pay the full cost of the premium, plus a 2 percent administration fee.
COBRA is a Band-Aid to fix problems caused by an employer-based health insurance system. It’s a reasonable concept, though it causes problems in practice.
For one thing, most employees get sticker shock when they see what health insurance actually costs, so only 20 percent or less—primarily those with expensive medical conditions—exercise their COBRA option. The rest just go uninsured, hoping nothing bad happens before they get another job.
While the former employee is paying the premium, the actual cost to the company can be significantly higher—a company that no longer even employees the worker.
The bill provides a subsidy that would pay 65 percent of the premiums for up to 12 months. The bigger problem is that the bill extends the eligibility period for older workers and widows—in some cases for up to 10 years.
Should companies be required to pay the lion’s share of the health care costs for former employees and their families for up to 10 years after they leave the job?
Once again, Congress is trying to claim credit for covering the uninsured while making someone else—business, in this case—bear much of the cost.