As unemployment remains at historic highs and new cases of COVID-19 are surging across the country, millions of Americans have lost or are at risk of losing their employer-sponsored health coverage.
Fortunately, congressional lawmakers have a chance to address this critical issue as they resume negotiations on a fourth relief package by instituting federal subsidies for COBRA health plans.
Over the last four months, more than 51 million Americans have filed new unemployment claims, and almost 40 million have been furloughed or laid off, losing their employer-sponsored health insurance benefits along with their jobs.
Like unemployment benefits, one might naturally assume that a sudden loss in health coverage is temporarily backstopped by the government until an individual’s situation improves or alternative options are found.
But this is not always the case. Millions of Americans instead find themselves stuck between government coverage for which they aren’t eligible and other alternatives that are too expensive. This Catch-22 is not sustainable, especially during the COVID-19 pandemic.
Enter COBRA Plans.
COBRA offers workers and their families the opportunity to continue receiving health benefits from their existing group plan temporarily in certain circumstances — most notably, sudden job loss. But continuing coverage through COBRA can be expensive.
Individuals must pay their annual premium in full — $7,188 for a single person and $20,576 for a family of four, on average — plus an additional 2 percent. Unfortunately, many people facing unemployment simply have no choice right now, as they made too much to qualify for government programs like Medicaid.
COBRA plans are their only alternative to risking no health insurance altogether.
Lawmakers could remedy this tough decision by offering federal COBRA subsidies in order to lower the cost of this insurance option. This would avoid the dangers of government-run insurance like Medicare-for-All while ensuring that fewer people decide to go uncovered.
For example, imaging a single mother of three with multiple sclerosis who has just been furloughed from her job as a floor manager at Macy’s.
On top of losing her job and having a family to provide for, she is unaware that a health insurance “coverage trap” now awaits her, too. Her continued treatment is essential, but she finds herself stuck with no new income stream, three kids, and a full year’s premium she must now pay in full.
She cannot make it work and decides to risk no insurance for a few months until this all blows over and she can return to work.
The only problem? Two months later, Macy’s cuts a quarter of its workforce, and she is no longer furloughed. She is unemployed.
How can we let the countless individuals experiencing similar situations in real life — those with chronic conditions, pregnant women or furloughed individuals — even face such a decision in the first place? These impossible situations have led to devastating personal and financial shortcomings at a time when every penny counts for most Americans.
To make matters worse, many have already paid significant parts of their 2020 deductibles out-of-pocket on employer-sponsored plans.
Now unemployed and without COBRA assistance, these individuals will be forced to select a new plan with a new deductible — taking them back to the starting line and putting covered benefits even further out of reach.
Unfortunately, as a result, we know that many will be forced to consider rationed or no care just to provide for their families and put a roof over their head.
COVID-19 has no known cure, and ensuring access to health care is all we’ve got when it comes to maintaining a healthy workforce and keeping our families safe and able to fight the virus if it does come knocking.
Numerous benefits have already been doled out in the form of PPP loans, stimulus checks and other tools, but COBRA subsidies have been thrown by the wayside.
For many Americans, however, none of it means anything unless they can continue necessary treatments without sacrificing their health or their family’s well-being in the process.
It is incumbent upon lawmakers to recognize this coverage gap and act to address it through federal COBRA subsidies in the coming coronavirus legislative package.
