Medical group CEO says COBRA expansion could hurt health care
Expansion of a federal program that allows people who have lost their jobs to retain access to health insurance might have the unintended consequence of discouraging employers from offering health insurance at all, said one Grand Valley employer.
The American Recovery and Reinvestment Act calls for employers to pay two-thirds of the cost of the so-called COBRA plans, lessening the financial burden on their former employees by half. Employers then could claim a tax offset equal to their COBRA payments on their quarterly tax forms.
Employees can remain on COBRA for up to 18 months. Employees terminated for gross misconduct are ineligible.
“Employers are already strapped” and might look to eliminate health insurance to save money, said Dale A. Reigle, CEO of Rocky Mountain Orthopaedic Associates in Grand Junction. “We’re a medical group, and I’d hate to see that, but it could be a consequence.
This is just one more thing to spur that on.”
Reigle said he was troubled by the lack of information about the change to COBRA before — “They sure as heck didn’t give out answers during the discussion phase” — and that too little information was immediately available after the bill was signed on Tuesday.
“It’s supposed to go into effect March 1,” he said, “but nobody knows for sure.”
Top in his mind is what happens with the program once the stimulus provisions expire, Reigle said.
“The thing I fear is that it’s going to become an ongoing mandate that’s no longer funded.”