COBRA Subsidies: The Best Way to Help Unemployed People Keep Their Health Insurance
As a result of COVID-19 and mandated business shutdowns in most states, over 37 million Americans have been thrown out of work, thereby losing their health insurance benefits.
Many people who have lost their jobs—especially conservatives—have expressed dismay at the choices they are forced to make when it comes to continuing to have health insurance.
They find themselves with basically two options, with financial incentives skewed towards channeling them into a government-run system:
They can enroll in Obamacare or apply for their state’s Medicaid program.
They can keep the health insurance plan they had at their job for up to 18 months under a COBRA plan, whereby they would pay 102% of their monthly premium.
The second option is undesirable because it is usually more expensive than people expect and thus people are dissuaded from it and pushed towards the first option. Still, the second option is the better of the two because it avoids the problems with socialized medicine that exist with Obamacare and Medicaid.
Yet, relevant to the first option, enrollment in Medicaid increased 2.8 percent between February and April, according to a report from Georgetown University’s Center for Children and Families. This consequence of COVID-19 is unpalatable to conservatives because it contributes to increasing the prevalence of socialized medicine in America.
The solution to the sticker-shock problem with COBRA is to make COBRA more affordable. The way to do this—in a way that could garner enough support among members of the Democratic majority in the U.S. House of Representatives to pass—is for the government to provide subsidies to allow people to make this choice more easily. A federal program to subsidize COBRA continuation is not a perfect one, to be sure, but again, it is superior to fueling an expansion of Obamacare or Medicaid.
Currently, the HEROES Act in Congress, drafted by Democrats, includes language on COBRA subsidies, which is good. Conservatives like this idea and prefer it over an expansion of Obamacare or Medicaid. Unfortunately, the HEROES Act is laden with so many undesirable components that the best-case scenario would be for the Republicans to oppose the HEROES Act and propose a leaner alternative that preserves the COBRA subsidy language.
Therefore, we call on Congress to keep millions of Americans in the private healthcare market by considering a COBRA subsidy.