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Mark Miller

Mark Miller

Posted: October 26, 2009 10:22 AM

Why the Silence on Extending Jobless Health Care Benefits?

What's Your Reaction:

What's more important: a cost-of-living increase in Social Security benefits for retired people, or health insurance subsidies for the unemployed? The answer depends on your clout in Washington.

With the economy still stuck in a ditch, lawmakers are debating extensions to the stimulus legislation passed earlier this year. One provision that appears well on its way to passage is a one-time $250 Social Security payment to seniors, intended as a substitute for the cost-of-living adjustment (COLA) that won't be coming in 2010 due to flat consumer prices. Meanwhile, a proposal to extend the federal subsidy of health insurance for jobless Americans appears to be stalled.

Don't get me wrong on the Social Security boost: senior-bashers who argue the payment is unwarranted are wrong. Still, it's instructive to see lawmakers scrambling to respond to angry -- but well-organized -- seniors, while the health insurance subsidy extension languishes.

The health care subsidy was one of the most useful provisions of the stimulus bill, but it didn't go far enough. The bill provides a 65 percent subsidy of COBRA benefits for people who lost their jobs between Sept. 1, 2008 and Dec. 31, 2009. COBRA allows you to continue on your former employer's health insurance plan for up to 18 months, but it's expensive; under normal circumstances, you pay 100 percent of the premium. So the subsidy provided an important boost to people who really need it while we wait for broader health insurance reform to get passed.

The subsidy is now expiring for many people who have depended on it, and the Obama Administration says it supports an extension as part of a broader set of steps aimed at bolstering the safety net for unemployed workers.

The cost of the original subsidy was pegged at about $25 billion, but no estimates on an extension have surfaced. Rep. Joe Sestak (D-Pennsylvania), who is running for Arlen Specter's Senate seat, introduced a bill this week that would extend the benefits.

The one-time Social Security payment is a different story. Federal law calls for an automatic COLA tied to an average of the Consumer Price Index in the third quarter each year, and there's no inflation to speak of in the economy right now. Therefore, no COLA in 2010--the first such instance since automatic adjustments were enacted in 1975.

AARP and others have jumped on the issue, pointing out that the COLA formula doesn't reflect costs that disproportionately impact seniors, such as health care, energy and transportation. They're also grappling with the bad timing of falling home values and investment losses at a time when many need to tap those assets.

President Obama endorsed the $250 one-time payment, which the White House says would cost $13 billion. The payments haven't been added formally to legislation yet, but appear to have plenty of momentum and support.

Let's hope Sestak is able to move the COBRA extension forward, too.

 
 
 

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