February 17, 2009 in City

On health care, stimulus skips many in middle class

Some will get help, some won’t
Noam N. Levey Los Angeles Times
 

WASHINGTON – John Peeler, an unemployed computer technician in South Carolina, soon might obtain health insurance for his wife and three children. Four months after being laid off, he is one of the jobless Americans who could receive thousands of dollars in government subsidies from the stimulus plan to be signed today.

Susan McKowen, a 62-year-old breast cancer survivor from Illinois, also lost her job in the economic crisis. But she won’t receive any 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 such as Peeler, McKowen and others swelling the ranks of America’s more than 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 a frenzied process in which sometimes arbitrary decisions were made to speed agreements and satisfy an array of political interest groups working to influence the 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 more conservative lawmakers. Another provision to allow older jobless workers such as McKowen to keep employer-based coverage until they qualify for Medicare was eliminated amid opposition from business groups who complained 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.

Despite the cuts, the aid package represents one of the largest new federal investments in health care in history, totaling more than $147 billion or nearly a fifth of the bill.

It includes $87 billion to help states shore up their Medicaid programs, which cover more than 55 million poor children, families and people with disabilities.

But the cuts in aid highlight one of the most vexing health care issue 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 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.

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 a proposal by House Democrats to open 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.

The nonpartisan Congressional Budget Office estimated that about 1.2 million people would have signed up for the Medicaid expansion.

“It’s important to note that there are some good parts of the bill,” said Anthony Wright, who heads Health Access California, a leading advocate of expanding health coverage. “I’m afraid it’s just not enough to prevent another spike in the uninsured.”


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