Get Short Term Health Coverage from Peak Services
WASHINGTON — John Peeler, an unemployed computer technician in South Carolina, may soon get health insurance for his wife and three children. Four months after being laid off, he is one of the lucky jobless Americans who could receive thousands of dollars in government subsidies from the new stimulus plan.
Susan McKowen, a 62-year-old breast cancer survivor from Illinois, is not so fortunate. Though she, too, lost her job in the current economic crisis, she won't be getting help with health insurance under the new law.
When President Barack Obama and his allies pulled together the $787 billion bill that passed Congress on Friday, they talked of helping workers like Peeler, McKowen and others rapidly swelling the ranks of America's 46 million uninsured.
But in the scramble to pass a bill, lawmakers made changes that left out millions of middle-class Americans who have lost their jobs and are struggling to fill a prescription or pay for a visit to the doctor.
That reflected the frenzied process that shaped the legislation in which sometimes arbitrary decisions were made to speed agreements and satisfy an array of political interest groups working to influence the gargantuan bill.
During last-minute negotiating, provisions were cut that would have opened the government-run Medicaid insurance program to the unemployed, a move opposed by conservative lawmakers.
Another provision to allow older jobless workers like McKowen to keep their employer-based coverage until they qualify for Medicare was eliminated amid opposition from business groups that said that would put new burdens on employers.
Even the rules governing which workers were eligible for aid were picked on the fly, officials acknowledged. Sensitive to businesses' concerns, senior Democrats decided to give health insurance subsidies only to workers who lost their jobs after September, even though the recession began nearly a year earlier.
That means Peeler, who was laid off in November, is eligible for assistance; McKowen, laid off 13 months ago when the recession was just starting, is not.
"It's just a matter of trying to balance interests and hold the line on spending," said Nebraska Sen. Ben Nelson, a centrist Democrat who helped negotiate the compromise that narrowly cleared the Senate on Friday.
Despite the cuts, the aid package is still among the largest new federal investments in health care.
It includes $87 billion to help states shore up their Medicaid programs, which cover more than 55 million poor children, families and disabled people nationwide. States reeling from the economic downturn have been cutting services for months, threatening aid to some of the country's most vulnerable residents.
The legislation also commits $19 billion to increase the use of information technology in health care, a long-delayed objective that policymakers believe is critical to lowering costs and improving quality.
The National Institutes of Health will get $10 billion more for research into cancer, heart disease and other illnesses. And lawmakers directed more than $1 billion to boost government efforts to study the comparative effectiveness of medical procedures, pharmaceuticals and devices, another step deemed critical to long-term health reform.
But the cuts in aid to workers seeking to hold on to their old employer-based medical insurance mean the bill has some holes in it when it comes to one of the most vexing health-care issues confronting Washington—the growing number of middle-class workers who are losing health coverage as companies cut their payrolls.
An estimated 3.6 million jobs have been eliminated since the recession began at the end of 2007, according to the U.S. Department of Labor.
Unlike the very poor who rely on Medicaid, most of these people had not looked to the government for health care, instead securing insurance through their employers or buying it themselves.
Now without income, some are faced with paying more than $1,000 a month to buy a new insurance policy or to keep the coverage they had at work under the federal COBRA law, which requires workers to pay the full cost of their premiums, picking up what their employers once paid.
Peeler, 39, looked at getting COBRA insurance when he was laid off in November from an apartment management firm. But he couldn't afford the premium—more than $1,300 a month.
His unemployment check of $326 a week barely covered the mortgage and the groceries, he said. And his wife, who had been looking for a job since the beginning of last year, couldn't find any full-time work.
Nor could Peeler find private insurance for his family. Every insurer he consulted refused to cover treatment for his daughter's mild psoriasis and his son's asthma, both classified as "pre-existing conditions."
"Private insurance is a joke," said Peeler, who has been working since he was 16 and never before sought public assistance.
The stimulus package that passed Congress this weekend may ease the burden for as many as 7 million people like Peeler who lose their jobs between last September and the end of this year. Under the bill, the government will pick up 65 percent of COBRA premiums for nine months.
The aid won't help McKowen, however.
She lost her job last January when the greeting card company she had worked for since the late 1970s was restructured by new owners.
McKowen signed up for COBRA coverage, which was vital, because getting a new insurance policy would have been virtually impossible with her history of cancer.
Now, she is nearing the end of the 18-month limit on COBRA, with no options. Her husband, an accountant, is self-employed and gets his insurance on the individual market.
"I just don't know where to turn," McKowen said. "I don't like pity parties. I know there are a lot of people who are far, far worse than me. ... But I need my health insurance. It's like my lifeline."
Adam Ross, a 40-year-old San Francisco attorney who lost his job in July, has another problem.
He and his partner, who was also laid off last year, are paying $820 a month under COBRA for insurance that Ross gets through his former employer, a San Diego software firm.
The two are subletting a room in a friend's house, using Ross' severance and their savings to pay for food, rent and Ross' loans from law school. They won't get federal aid because Ross lost his job last summer, too early to qualify.
"It's kind of getting down to the wire," Ross said. "I think we have a couple more months. ... We try not to think about what happens after that."
Some lawmakers wanted to make the COBRA subsidies available to people who lost their jobs before September.
But such a move would have faced resistance from employers who have long been wary of the administrative burdens of keeping former employees on their health plans. Some companies already encourage current employees and their families not to use the health plans they offer.
Business groups successfully beat back a proposal by House Democrats to allow unemployed workers over 55 to pay to keep their employer-based health insurance for up to 10 years until they qualify for Medicare.
"COBRA should not be regarded as a source of long-term coverage," National Business Group on Health President Helen Darling wrote lawmakers last month, warning that would push up health-care costs for existing employees.
Republicans, meanwhile, rebelled at another proposal by House Democrats to open up Medicaid to those who have lost their jobs, a major shift in the program now reserved primarily for the nation's poorest families.
Many conservatives worry about enlarging a government program that is already straining to care for the poor and driving away many doctors because of the government's relatively low reimbursement rates.
Senate Democrats, who needed Republican votes to pass the stimulus legislation, did not include the Medicaid expansion in their version of the bill. It was dropped in the final compromise.
That continues to worry consumer advocates, who note that many people losing their jobs are not eligible for COBRA because their employer either did not offer insurance or has gone out of business.
The non-partisan Congressional Budget Office estimated that about 1.2 million people would have signed up for the Medicaid expansion.
