As the nation slips deeper into recession and more jobs are lost – California’s 9.3 percent unemployment rate is third-highest in the country and climbing – the need for health care for jobless workers is more acute then ever. Tucked into the $789 billion economic stimulus package signed this week is funding to provide cushion for workers whose health care coverage disappears when they no longer have employers.
At issue is a program known as COBRA, for Consolidated Omnibus Budget Reconciliation Act, which provides health-care coverage to workers who find themselves out of a job and no longer able to get it through an employer. The problem with COBRA,. as any laid-off worker can tell you, is that it is expensive: $800 a month or more for a small family is not uncommon. The bill hits at precisely the time that the worker is least able to afford it, after a job has been lost. Although the COBRA piece of the federal funding has not drawn as much public attention as other provisions – Medi-Cal, for example – it is viewed as critical to California’s workers.
The federal stimulus package provides funds to help cover nine months of COBRA, and is applied retroactively to workers who lost their jobs or lost their coverage beginning last October. The stimulus funds will cover 60 percent of the tab; the worker picks up the remaining 40 percent, which is still a hefty tab for a jobless worker.
There is no way to know yet exactly how much money will flow to California, but one factor that plays into the formula is the state’s jobless picture, said Anthony Wright, executive director of Health Access, a labor-related coalition that advocates spreading quality health coverage among the workforce. “There is no way to know for sure, but a portion (of funding) is geared to the high unemployment,” he said. “We are concerned about it being affordable or available, but it will be a big help to a lot of Californians, and that’s important.”
“Unfortunately, it will not prevent a spike in the uninsured rate, but hopefully it will help everybody who left their jobs since last October,” he added.
The COBRA funding may arrive at the same time that thousands of public employees are thrown out of work because of the state’s continuing budget impasse. Gov. Schwarzenegger’s administration on Tuesday began sending out notices to 20,000 employees warning of looming layoffs. Just how many workers ultimately may lose their jobs is unknown, according to the Department of Personnel Administration, but the figure could be as high as 10,000. That number could change, however, if state revenues dwindle further and the state is forced to begin a new belt tightening.
Other health- and social service related issues are affected by the new stimulus package, according to a report in the California Disability Community Action Network, which tracks programs and funding. The federal package “could prevent cuts in the State for several critical programs impacting people with disabilities, the blind, seniors and low-income families… “and will send billions to California for “public housing, public transit, and special education.”
The state is expected to receive a large share of the $12 billion available nationally for children in special education programs – the largest amount ever made available for special education. In California, there are about 650,000 special education youngsters.
The federal money also means that some cuts which were expected because of the state’s $41.6 billion budget shortage will be avoided, although perhaps not entirely. “The passage of the federal economic stimulus bill will have major impact to the budget crisis in California and other states depending on the actual level of funding that comes specifically to the state will mean that major cuts to In-Home Supportive Services, some (but not all) grant level cuts to SSI/SSP and CalWORKS and elimination of the Medi-Cal optional benefits. Cuts that are tied to the funding that comes from the economic stimulus bill are called “trigger cuts,” the group noted.