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Unemployed and Uninsured

The debate over whether we need another stimulus and, if so, what kind, has generally focused on employment. Whether it’s a question of hundreds of billions versus mere billions of dollars, or of infrastructure spending versus tax cuts, the bottom line is always the same: Will it create jobs? And that’s entirely appropriate. A faster growing economy with higher employment will benefit everybody, starting with the people who don’t have jobs right now.

But a well-designed recovery plan should do more than merely reduce unemployment. It should also ease the suffering that goes with joblessness. And that’s no small thing, as a new report from the Commonwealth Fund reminds us.

The report, published on Wednesday, is based on the Fund’s biennial survey on health insurance. This time, the survey writers had the good sense to ask questions about whether people had lost their jobs recently – and, if so, what they did about health care. Then they extrapolated from those results to estimate the effects of joblessness on the entire population.

The results were sobering: Of the roughly 15 million Americans who lost jobs with health benefits between 2008 and 2010, more than half ended up without health insurance because they could no longer find affordable coverage. Among those newly uninsured, nearly three-quarters postponed or skipped recommended medical care because of cost. The newly uninsured also experienced other negative financial consequences, although overall they didn’t seem markedly worse off financially than the people who held onto their coverage. It appears, in other words, that most people coped primarily by getting less medical attention or carrying more medical-related debt.

The full results are here and I’ll give my usual disclaimers: Survey respondents don’t always answer questions accurately and I can’t vouch personally for the statistical extrapolations. (Honestly, I've been working on a print article, so I haven't even read the report as thoroughly as I normally would.) But the survey findings are consistent with everything we know about the nature of the health insurance market -- and what happens to people when they lack coverage. Although many workers are eligible to maintain coverage for two to three years through COBRA, the premiums are frequently higher than unemployed people, particularly in low-income families, can afford. Finding new and decent coverage in the individual market, meanwhile, is a nightmare, particularly for people with pre-existing conditions.

When the Affordable Care Act takes full effect, the unemployed should have a much easier time getting both good insurance and insurance they can afford, thanks to expanded Medicaid eligibility, insurance exchanges that offer subsidized coverage to all, and regulations allowing young people to enroll in their parents’ plans until age 26. But that won’t happen until 2014. In the meantime, the report’s authors note, the government could decide to subsidize COBRA premiums, as it did temporarily when it enacted the Recovery Act.

Subsequent studies suggested those subsidies helped people hold on to coverage. On the other hand, it’s possible that, given limited resources, a dollar in extra Medicaid matching funds, unemployment insurance, or direct aid to the states would help more than a dollar in COBRA subsidies. But the broader, more important argument of the report isn't about a particular policy intervention. It's about the nature of the economic crisis. The unemployed need help. And while that means helping them find work, it also means helping them to meet their needs.

Note: The Commonwealth Fund has underwritten some of my research on health care systems abroad.