WASHINGTON – Congress and the incoming Obama administration are contemplating profound shifts in the government’s role in health insurance to try to alleviate a significant ripple effect of the damaged economy: Americans losing health coverage as they lose jobs.
As part of a sprawling $825 billion strategy to heal the economy that House Democrats laid out last week, lawmakers and transition officials envision a two-prong approach to help unemployed people retrieve health benefits.
One would reshape a basic entitlement program, allowing states temporarily to sign up jobless residents for Medicaid, with the federal government for the first time paying the entire cost.
The other proposal would provide unprecedented federal subsidies to help people afford coverage under COBRA, a law that allows some laid-off workers to buy health benefits that they used to get through their jobs.
The twin ideas, preliminarily estimated to cost $39 billion through the end of next year, would represent sharp departures in two long-standing programs and already are sparking debate along the ideological continuum on Capitol Hill and beyond. In Congress, several key Democratic House members and senators have endorsed the broad contours, while a few Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., have signaled that they are wary. Debate, however, will not solidify until lawmakers learn more precisely how much the proposals would cost and how many people they might help.
Among outside health policy specialists, conservatives are critical of expanding an entitlement and are predicting that states would have a hard time shutting the spigot of help once the federal money stopped. Liberals are predicting that, even with the large federal investment, coverage could remain unaffordable for too many people.
Politically, including insurance help for the unemployed in a fast-acting economic stimulus package is part of a strategy by congressional Democrats and President-elect Barack Obama to place attention on health care right away. It is in sync with a decision to pursue immediately an expansion of health insurance for poor and working-class children, long resisted by President Bush, which the House adopted on Wednesday and a Senate panel approved the next day.
Taken together, the insurance for children and laid-off workers signifies an effort by Democrats to create momentum for the more difficult work of broad health reforms that they and the Obama administration plan to undertake soon.
In recent weeks, lawmakers have collaborated with the incoming administration to devise remedies for the jobless uninsured and to decide how much money to allot. A transition aide said: “Obama supports the protection of health insurance through COBRA and Medicaid in a time-limited way.”
House Democrats say publicly that they would like to devote $30 billion over two years to subsidize COBRA and $8.6 billion to expand Medicaid. Privately, legislative sources said those figures are premature, because lawmakers are awaiting budget analyses of how much the proposals would cost – and how many unemployed Americans would be likely to grasp the help.