Say you’ve lost your job due to lay-offs. You can cut many expenses — cancel cable, stop eating out, buy cheaper food — and hold others constant — rent, phone. But in the US there is one thing you’ll have to pay more for, often three to four times more, than when you were employed: health insurance. The COBRA health insurance extension is supposed to aid the unemployed, but instead it requires the unemployed person to pay the full cost of their health insurance. If your employer paid 75% or even 60% of your health insurance premiums, you now have to pay the employer’s share plus your share to maintain the health insurance coverage.
For many families, this might mean paying over a thousand dollars per month when you’ve just lost your job. How would you do that? This is why many people lose their health insurance and then are stuck with outrageous medical bills if a family member becomes seriously ill or needs continued care.
The Senate version of the stimulus bill would subsidy half the cost of the premiums for a year, but this would still require most ex-employees to pay more each month than they currently do for their health insurance. This is one of the US’s stupidest social policies. Rather than spending time looking for a job, many people need to figure out what cheaper, state program they might qualify for. Then they need to find doctors and pharmacies that accept those plans.
Why does this situation persist? Any likely change will probably be paid for by imposing a tax or fee on existing health insurance, so those people who currently have health insurance as part of their job have no desire to see those payments increase further to pay for people who are unemployed. And so a vicious cycle sets in.
