Economy swallows benefits as well as jobs

Many people lose their health insurance when they lose their jobs, and during the first eight months of the year this was true in few states more than it was in Alabama, according to a new report.

The report by Families USA, a nonprofit health care advocacy group, ranked Alabama sixth in the country among the percentage of adults left without health insurance after losing their jobs.

The study estimates that the continuing increase in unemployment during those eight months caused about 4 million more adults between the ages of 19 and 64 to become uninsured in the United States and that about 82,900 of them live in Alabama. It estimates that the total number of uninsured adults in the country is now more than 50 million.

Ron Pollack, executive director of Families USA, said the increase is directly related to the fact that so many working adults get their insurance through their employers.

"People who receive a pink slip experience a double whammy," he said. "They not only lose their jobs, but their health care as well."

Pollack said some of those who lose their jobs could still continue their health coverage for 18 months through COBRA, but it is generally cost prohibitive to most out-of-work employees. He said health care reform will provide a safety net for people who lose or switch jobs.

But reform has been a hard sell in Washington, D.C., and in Alabama. The state's congressional delegation -- both Democrats and Republicans -- has given reform proposals a resounding thumbs down, and Gov. Bob Riley isn't happy with what's been offered either.

In a letter to the members of the delegation, Riley expressed a fear shared by many states -- that the bill includes a major expansion of Medicaid that states would have to absorb.

Although the federal government picks up the tab for most of the state's $4.9 billion Medicaid budget for fiscal 2010, the state had to kick in about $1.1 billion. Riley said that the state's Medicaid department estimates that the cost of expanding Medicaid to 150 percent of the federal poverty level could cost Alabama taxpayers an additional $1.2 billion per year.

Alabama Medicaid Commissioner Carol Steckel said it's impossible to know what the final impact will be because everything about the health care reform proposals as they exist is constantly changing. She cites the Senate Finance Committee's recent release of legislative language as on example.

"While there has been discussion about the federal government picking up some of the cost, the reality is that Alabama cannot afford any expansion of Medicaid," said Steckel, who also serves as the chairwoman of the National Association of State Medicaid Directors.

"Even if the federal government picked up all of the cost for benefits, and no one in Congress has suggested they will, there has been no discussion about compensating state Medicaid programs for the increased administrative costs, such as eligibility workers, computer time, equipment, and claims and application processing."

Jim Carnes, spokesman for Alabama Arise Citizens Policy Project, said advocates of health care reform have been pushing for the federal government to pick up all of the cost of any expansion of Medicaid and he believes they will have something worked out before the legislation is passed.

Carnes said Alabama advocates for health care reform are pressing the state's delegation to look at the proposals based on what they could do for Alabama.

"We're so hopeful that our delegation will do what's right for Alabama and not follow some national party line," he said. "Affordability of coverage is the key goal of this reform measure and it hits right where Alabama needs it."