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Recovery

Posted by: Ron Pollack, Executive Director, Families USA on Feb 17, 2009

The final economic recovery package worked out by Senate and House confereesis by no means perfect, but it will help to address some of the health careproblems that America'sfamilies have experienced due to the recession.

One of the most significant and helpful measures in that legislation is theprovision of $87 billion in additional matching funds to states for theirMedicaid programs. As Families USA catalogued in two of our recent reports,many states have already cut back health coverage for low-income people andfamilies -- some by reducing already-meager eligibility standards orimplementing user-unfriendly enrollment systems designed to limit Medicaidparticipation, others by reducing benefit coverage, yet others by increasingcost-sharing requirements, and still others by reducing provider payments. Manyother states are in the process of enacting similar measures.

These cutbacks, if implemented, would no doubt harm many millions oflow-income people for whom Medicaid is a lifeline. The influx of new federaldollars to states is expected to avoid these damaging cutbacks -- like suchtemporary fiscal assistance to the states successfully achieved during the lastrecession. This is most commendable.

The legislation will also help newly laid-off workers and their familiesretain health care coverage. It provides assistance to them by offering asignificant subsidy to help pay for COBRA premiums. This is very important. Arecent Families USA report shows that the average COBRA premiums for familycoverage consume 84 percent of average Unemployment Insurance benefits, therebymaking COBRA impossible to afford. The new COBRA subsidies will enable manyfamilies to continue the health coverage they had in their previous job.

The health provisions in the bill, however, while laudable, do not provideenough help to laid-off workers and their families. Unlike the original Housebill, the final legislation does not include temporary Medicaid eligibility forthose who are ineligible for COBRA or who can't afford COBRA premiums even withthe new subsidies. As a result, the ranks of the uninsured will no doubt growsignificantly as the recession persists.

The regrettable absence of the Medicaid coverage provision helps tounderscore the importance of enacting meaningful health care reform in the verynear future. With the adoption of the economic recovery legislation, it is timeto start the health reform process so that legislative action can be completedthis year.

This post also appears on the National Journal's Expert Blog on Health Care.