CONSUMERS UNION URGES CONGRESS TO HELP LAID-OFF WORKERS
PAY FOR PRIVATE HEALTH INSURANCE

New report "A Pink Slip Away" says House Ways and Means bill fails to meet
health needs of displaced workers and employers who provide health coverage

WASHINGTON, D.C. -- Consumers Union (CU), the publisher of Consumer Reports magazine, today released a new report urging Congress to provide health care assistance for laid-off workers, citing critical elements missing from the House Ways and Means economic stimulus bill.

The CU report "A Pink Slip Away"* recommends that Congress offer short-term health subsidies for displaced workers through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA gives laid-off workers the option to continue their employer-provided health insurance coverage, but at the workers' own expense. Without employer subsidies, most people cannot afford the coverage.

"So far, the House has totally missed the mark in providing what is needed to help those who have lost their jobs and their health insurance in the wake of September 11," said Gail Shearer, Director of Health Policy Analysis for Consumers Union's Washington DC Office. "If Congress really wants to stimulate the economy and reduce the burden on employers who offer health coverage, lawmakers must provide a direct, federal health subsidy for the displaced."

CU is asking Congress to provide:

Shearer, who co-authored the study with Susanna Montezemolo, CU Esther Peterson Fellow, said the subsidy would benefit employers as well as the displaced.

"COBRA coverage is so expensive that younger, healthier people tend to take their chances without it, leaving older workers in poorer health as the ones most likely to enroll," said Shearer. "This drives up the total costs of the employer health plan and increases the average cost of insuring each employee. Subsidizing COBRA premiums would make coverage more attractive to healthier workers. This would expand the pool of covered individuals and lower the average cost of health plans for employers and insurance companies. A COBRA subsidy would reduce the pressure for employers to drop coverage or for insurance companies to raise premiums, and this would help dampen pressure to increase premiums paid by workers."

###

* The Consumers Union report "A Pink Slip Away" is available online at http://www.consumersunion.org/health/cobra/cobra.htm

Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers.