Gov. John Baldacci wants to use $15 million made available through the federal stimulus package to help an estimated 8,000 unemployed Mainers maintain health care insurance.
Under the proposal, eligible laid-off workers would receive vouchers to help pay for continued employer-based coverage through the Consolidated Omnibus Budget Reconciliation Act, known as COBRA.
A subsidy would be made available to laid-off workers whose employers were too small – fewer than 20 employees – to fall under COBRA requirements. The assistance would be limited to nine months.
Joe Ditre of Consumers for Affordable Health Care said the proposal would help Mainers bear the burden of very expensive health insurance policies during difficult economic times.
"I'd say it's a very smart way to use stimulus dollars," said Ditre, the advocacy group's executive director. "This is an 'A' – and I'm a hard grader."
The initiative is part of a package of health care proposals that Baldacci announced in his State of the State address this week. The proposals, which require legislative approval, have been sent to the Office of the Revisor of Statutes to be drafted into bills.
Increased Medicaid funding in the federal stimulus package freed up money for the health care initiatives. The Baldacci administration and the Legislature agreed that the first priorities would be settling Medicaid back payments with hospitals, and unspecified one-time health care expenditures, said David Farmer, the governor's deputy chief of staff.
In the past, individuals paid 102 percent of the premium cost to remain covered by their employer's insurance through COBRA. The federal stimulus package, officially called the American Recovery and Reinvestment Act, created a temporary tax credit that covers 65 percent of the cost of COBRA premiums for nine months.
Baldacci's proposed voucher plan would provide an additional subsidy, with the amount determined by an individual's financial circumstances. Some laid-off workers would pay as little as 20 percent of COBRA costs overall, said Trish Riley, director of the Governor's Office of Health Policy and Finance.
The concern was that even 35 percent of premium costs would be out of reach for some laid-off Mainers, Riley said.
"It's not cheap when you're unemployed. It was probably more than you were paying before," she said.
One-third of Maine employers have fewer than 20 employees and therefore don't fall under the COBRA requirements, Riley said. A worker laid off from one of those companies would be able to buy a temporary plan offered by Harvard Pilgrim Health Care through the Dirigo Health Agency. Subsidies would be based on income, with individuals paying from 20 percent to 80 percent of the premium cost.
To be eligible for either option, participants would have to have income of less than 300 percent of the federal poverty level, which translates to $32,490 a year for an individual.
Their health coverage would have to have been lost in the period from Sept. 1, 2008, to Dec. 31, 2009.
Individuals who can get coverage through another group plan, such as a spouse's plan or Medicare, would be ineligible.
It has been clear that the cost of COBRA has been a problem, said Gordon Smith, executive vice president of the Maine Medical Association.
He said that even 35 percent of a premium could be beyond the reach of the unemployed, especially when a family health care plan in Maine can cost $15,000 to $24,000 a year.
Tarren Bragdon of the Maine Heritage Policy Center worries that the temporary program could turn into a permanent one, saying that government programs can be easy to start but hard to kill. He said it is important to look at ways to make private health insurance more affordable by creating a more flexible and competitive market.
"We're kind of rewarding people who aren't working, and maybe they're...
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