Ever heard of COBRA? You probably have if you lost a job and were offered the opportunity to keep your health coverage. Under the 1986 Consolidated Omnibus Benefit Reconciliation Act (COBRA), workers who are laid off must be offered, by their employer, the opportunity to purchase their existing coverage for up to 18 months. This was one of those “reforms” that Congress was pressured to give with the skyrocketing cost of health care and the massive number of workers laid off following the recession of the early 1980s.
Getting these health rights for unemployed workers was very important, but this kind of reform had a short-term value and is now almost useless. Those who have consistently opposed a federal commitment to health care began using the COBRA program as an example of how the current system can take care of those in need.
The publicity value to the anti-national-health legislative forces is important. Sure, unemployed workers have a right to buy their present coverage, but that right has a very high price tag – a tremendous monthly cost. Also, these workers who are eligible for COBRA are not counted as being part of the uninsured.
For corporate medical ideologues, this value is very high. It is still very important to the medical-industrial complex and their bought and paid for politicians who trumpet the old saw, “The U.S. has the best health care system in the world. There may be some dislocations, but the system is best in private, for-profit, competition hands.”
The cost of COBRA is directly determined by the benefit package that the worker had at the time of job termination. The cost for a single person is about $500 a month; for a family the cost can range from $700 to $1,200 a month. Now, anyone can figure out that the weekly unemployment insurance payment that the now jobless worker receives would be almost entirely sucked up by those costs.
A recent New York Times Magazine article described an unemployed computer worker who had been making about $100,000 a year before he was laid off. His wife, who had cancer, was under going very expensive chemotherapy treatment.
For this family, the COBRA payment was $832 a month. Because the family had too many assets they were not eligible for Medicaid, the federal program that takes care of low-income families.
The cancer treatment, even with their previous insurance, was not entirely covered. They have outstanding bills of about $3,000. The family was faced with the option of eating less – they have two children – or dropping the COBRA coverage.
The article reported that the family decided to drop the COBRA and that meant dropping the chemotherapy. They understood they were taking a chance, but they really had no choice.
This one example is being duplicated across the country as the current recession deepens and health care costs escalate.
The reality is quite different for those without jobs. It is a special problem during a period when the jobless rate is on the rise and a spell of unemployment can last beyond 18 months. Or, as in many cases, when workers are forced to accept jobs for low wages and no health benefits.
When labor and community activists lobby their elected officials for national health care they should be sure to make them aware of the failure of the COBRA program.
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