By Lauren Bikoff, MLS
Most Americans want legislation to help pay for health insurance in light of COVID-19.
The majority of Americans (86 percent) support the two laws that have been passed in response to the pandemic, but 79 percent believe that more legislation needs to be passed before the November election to continue to help those impacted by COVID-19, according to research from Public Opinion Strategies on behalf of the American Benefits Council and the Alliance to Fight for Health Care. The poll of 1,000 voters found that 90 percent believe the government should take action to ensure those who have lost their job maintain their employer-provided health coverage.
"The message to Congress could not be more clear," said American Benefits Council president James A. Klein. "Lawmakers should pass legislation that will help individuals maintain their job-based health coverage if they are laid off."
The support for the government acting to help those who have lost their job stay on their employer-provided plan has bipartisan support. The poll found that 86 percent of Republicans (59 percent strongly), 87 percent of Independents (64 percent strongly), and 94 percent of Democrats (84 percent strongly) support this plan.
COBRA subsidies. One way of providing financial assistance to help laid off workers keep their employer-provided plan would be to offer subsidies for COBRA coverage. However, a recent Employee Benefit Research Institute (EBRI) study, COBRA: A Closer Look at Who Enrolls and the Case for Subsidies, noted that COBRA beneficiaries are systematically different from full-time employees and their dependents. However, a government-provided COBRA subsidy could help to improve the adverse selection most employers face when providing COBRA coverage.
EBRI found that the average COBRA beneficiary is older and less healthy than their counterpart. COBRA beneficiaries are on average 50 years old, while full-time employees are 42.6 years old. In addition, COBRA beneficiaries were more likely than their counterparts to have certain health conditions, such as COPD, diabetes, cancer, high blood pressure, high cholesterol, mental health disorders, and musculoskeletal disorders, and they are more likely to have spent more days in a hospital.
The study also finds that the average COBRA beneficiary uses more health care services and spends significantly more than the average person covered by insurance. In 2018, among those with individual coverage, full-time employees used an average of $6,724 in health care services. COBRA beneficiaries used an average of $18,752, a nearly 300 percent difference.
Because EBRI finds, on average, people who receive coverage through COBRA are systematically higher spenders, extending subsidies for newly separated workers to enroll in COBRA could be beneficial from a public policy perspective by improving the risk pool for COBRA claimants. "The systematically higher spenders who have historically claimed COBRA benefits might instead be balanced out by marginally healthier former workers who choose to enroll on account of receiving a subsidy," explained Paul Fronstin, director of the health research and Education Program at EBRI. "The ratio of spending by those covered by COBRA to those covered by a full-time employee has dropped over time, however, indicating that the adverse selection mechanism has already been slightly moderated."
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