Friday, August 14, 2009

Ask the Administrator: Sixty Days

A midwestern correspondent writes:

I'm starting a new full-time job next month, and I'm really excited about it. But my new college has a 60 day waiting period between my start date and when I actually receive health insurance. I'm grateful for the job, of course, but I don't understand the 60 days. Do you know why I have to pay for COBRA for two months into a new job?

First, congratulations on the job! In this year's market, that's particularly great news!

That said, though, I'm at a bit of a loss to explain the 60 days. It's one of those policies I've heard of, but never understood. (Wise and worldly readers who can shed light are invited to do so in the comments.) It puts you in a really nasty position. For those leaving positions with health insurance, they're staring at a month or two of COBRA. Under COBRA, as I understand it, the former employee can continue prior coverage for a limited time at the low, low cost of 102 percent of the sum of the old employer contribution plus the old employee contribution. It's called COBRA because it bites; for family coverage, you're looking at easily over a thousand dollars a month. (This, on top of moving costs.) Incredibly, it's still usually cheaper than the individual market, but for a new employee on a modest budget, it's prohibitive.

(I've heard of some systems in which your premium for new coverage starts after 30 days, even though the coverage doesn't kick in until 60. So you get the double whammy of COBRA payments and the new premium on top of it. Ouch.)

I guess it's possible that the idea was to prevent gaming the system by making it impossible for someone to put a relative on the payroll on Monday just in time for a quadruple bypass on Tuesday. But that's something to address by managing how hiring is done. And if a new employee gets hit by a truck after six weeks on the job, it's not clear to me why that employee should be left defenseless.

As regular readers know, I'm a strong believer in a universal single-payer system. Decouple health insurance from employment, and consign terms like 'COBRA' and 'pre-existing condition' to the dustbin of history, alongside 'debtors prison' and 'poll taxes.' Adjuncts need coverage, too, and there's no earthly way for most public colleges to cover that through existing appropriations. But even if we fall short of the policy I'd prefer, the 60 day "hold your breath and hope for the best" period strikes me as perverse.

Wise and worldly readers -- is there a way this makes sense? I'm perplexed.

Congrats again on the job!

Have a question? Ask the Administrator at deandad (at) gmail (dot) com.