April 23, 2002 | WebMemo on Health Care
The narrow health care provisions in the Trade Adjustment Assistance (TAA) bill will leave many unemployed workers and their families without private health care coverage. The bill's legislative language restricts displaced workers' access to affordable private coverage by limiting its assistance to highly expensive COBRA coverage authorized under the Consolidated Budget Reconciliation Act of 1986, thereby excluding many workers from receiving any assistance for private coverage at all.
This "COBRA-only" policy is unfair. Instead, Congress can ensure that all displaced workers are eligible for assistance and are able to obtain the private health care coverage of their choice. Such a proposal was passed twice by the House of Representatives during the economic stimulus debate, was endorsed by the President, and attracted bipartisan support in the Senate, but Majority Leader Thomas Daschle (D-SD) blocked any consideration by the Senate.
Why COBRA-Only Falls Short.
In order to cope with job loss following the September 11 terrorist attacks and the recession, some Senators proposed extending federal health care assistance to those displaced workers who could maintain their health care coverage under the terms of the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA). COBRA allows unemployed workers to keep their employer-sponsored coverage provided they pay the full premium and a small administrative fee. It applies only to those firms with 20 or more workers and lasts for just 18 months.
This narrowly designed proposal failed to attract broad congressional support during the economic stimulus debate. It has now reemerged as a provision of S. 1209, the Trade Adjustment Assistance for Workers, Farmers, Communities and Firms Act of 2001. S. 1209 would extend the same COBRA-only assistance to workers who lost their jobs due to increased international trade competition.
There are several compelling reasons why a health policy based exclusively on a continuation of COBRA alone for private health care coverage would not be an effective solution for many displaced workers. Specifically:
How to Extend Assistance to All Displaced Workers.
A sound health care policy would be both generous and inclusive. First, all displaced workers, not just COBRA-eligible workers, should be able to maintain private health care coverage. Second, all displaced workers should be able to choose plans based on their assessment of their own medical and financial situation. Nobody else is better suited to make such decisions for themselves and their families.
Instead of restricting eligibility and eliminating or narrowing coverage choices, as is done in S. 1209, Congress should guarantee that all displaced workers are able to obtain affordable private health coverage of their own choosing. To accomplish this, Congress must:
Congress has yet another opportunity to help the unemployed and prevent displaced workers from joining or remaining in the ranks of the uninsured, but it must do this the right way by reaching out to families who need assistance the most. It can provide these displaced workers with generous assistance that will enable them to secure affordable, private health care coverage for themselves and their families. This could be a first step in creating an insurance system for workers that is truly portable, regardless of their job or job status, and that enables workers to maintain coverage for themselves and their families throughout their lives.
Owcharenko is Health Care Policy Analyst at The Heritage