Employers Await Instructions on Implementation of COBRA Subsidies Included in Economic Stimulus Package

The Obama administration has not provided employers with instructions for implementation of federal subsidies included in the recently enacted economic stimulus package to help recently unemployed workers cover the cost of health insurance premiums under COBRA, and "tens of thousands of jobless people could wait months before getting help," the AP/Philadelphia Inquirer reports (Werner, AP/Philadelphia Inquirer, 3/2). Under the stimulus package, workers involuntarily terminated between Sept. 1, 2008, and Dec. 31, 2009, whose annual incomes do not exceed $125,000 for individuals or $250,000 for families qualify for subsidies to cover 65% of the cost of health insurance premiums under COBRA for as long as nine months (Kaiser Daily Health Policy Report, 2/27).

Employers await instruction from the Internal Revenue Service and the Department of Labor on implementation of the subsidies. Among other concerns, employers have questions about whether former employees who accepted buyouts qualify for the subsidies. "Until employers get the guidance they need and notify potentially eligible ex-employees, most workers will not apply for the new benefit," and many "probably will not know it exists," according to the AP/Inquirer. Heath Weems, director of human resources policy at the National Association of Manufacturers, said, "Too many people are still trying to figure this out," adding, "There is a lot of confusion."

IRS and DOL on Thursday posted some information about the subsidies online, and they plan to provide additional information as early as possible (AP/Philadelphia Inquirer, 3/2).

Comparative Effectiveness Research Concerns
The $1.1 billion included in the stimulus package for research to compare the effectiveness of medications and medical devices remains "politically contentious" because of "how this research will be used," the Boston Globe reports. Pharmaceutical and medical device companies, as well as some patient advocacy groups, have raised concerns about the use of such research to determine coverage decisions by Medicare and private health insurers.

Rick Smith, vice president for policy at the Pharmaceutical Research and Manufacturers of America, said, "Medicare denials of coverage could have a devastating effect in terms of one-size-fits-all determinations that could make it very, very difficult for patients to find alternatives." Dennis Smith, a senior research fellow in health economics for the Heritage Foundation, said, "Health care is full of stories of doctors trying to do something better for their patients because what they had wasn't working," adding, "My concern is that comparative effectiveness, in the hands of government, starts stifling that kind of innovation."

Supporters of such research, such as health insurers and large employers, "acknowledge that studying the relative value of different therapies does not always yield straightforward answers" but maintain that the U.S. "cannot afford to ignore the potential for savings," the Globe reports (Wangsness, Boston Globe, 3/2).

Opinion Piece
Wisconsin Gov. Jim Doyle (D) and other governors who "had been borrowing money to underwrite expansions of health care" and other programs during "good times" earlier this year had "lined up at the federal trough begging for billions in 'free money' to cover budget deficits and to fuel new spending" under the stimulus package, but those funds will only allow those governors to "go on spending and even taking on new obligations that will lead to larger deficits down the road," Scott Walker -- the Milwaukee County, Wis., executive -- writes in a Wall Street Journal opinion piece. "Too many politicians confuse more government spending with economic recovery," Walker writes, adding, "Excessive spending will only lead to higher taxes, and that will drive jobs away when we need them the most" (Walker, Wall Street Journal, 2/28).

Broadcast Coverage
NPR's "Tell Me More" on Friday included a discussion on how a number of Republican governors might not accept all the funds available to them in the stimulus package. The discussion features Ken Rudin, NPR's political editor and writer of NPR's "Political Junkie" blog (Coleman, "Tell Me More," NPR, 2/27).