Thread by @charles_gaba

Hoo boy. Again, I’m not a fan of COBRA but there are legitimate reasons for doing it this way in this particular situation.

https://twitter.com/mehdirhasan/status/1374513466589908992

First, I'm not sure where @MehdirHasan gets $35 billion from. According to the @USCBO score of the final Senate version of the #AmRescuePlan, the gross cost of the #COBRA provision is $37.2 billion (slightly *higher*), but the *net* cost is $22.8 billion:
cbo.gov/publication/57…

Second, the *net amount being spent per COBRA enrollee*, according to the CBO, was around $2,600 apiece under the *House* version *$7.84B / 3.0M) to cover 85% of their premiums. If you ignore savings (why?), the *gross* amount was around $4,800 apiece:
acasignups.net/21/03/17/updat…

The Senate CBO score is much higher because a) it assumes 100% subsidies vs. 85%, and b) it assumes a *lot* more COBRA enrollees because of that 100% subsidy. It doesn't project how many more, but if you ⬆️ spending per enrollee to acocunt for the extra 15% it should be ~7.4M.

Via the Senate version, that's either $22.8B / 7.4M = ~$3,100 apiece. If you use the gross amount, that's $5,000 apiece.

Avg employer-sponsored insurance premiums run around $7,500/year, or ~$3,750 for six months...right in between all of the above estimates, so this checks out.

HOWEVER, let's set aside the dollar amount and get back to @MehdirHasan's original question: Why spend the $35B (actually $22.8B or $37.2B, depending on your POV) on COBRA instead of shifting these ~7.4 million people to Medicaid, Medicare, or even subsidized ACA plans?

Believe it or not, under *normal* circumstances, I think "Losing your job automatically qualifies you for Medicaid" *does* make more sense as a general policy than "Losing your job means the gov't covers your COBRA premiums".

However...these are not normal circumstances.

Shifting 7.4M people from employer plans to Medicaid *en masse, all at once* would cause a huge mess...not just at the back end, but also for the enrollees, who likely would have to deal with different PCPs, specialists, hospitals, formularies, etc.

https://twitter.com/lorihensler/status/1374529317762383872

Also, my guess is many of these folks have been on employer coverage for many years or decades). They may not be familiar with navigating the intricacies of the Medicaid system. I'm not crying in my soup for them, I'm just saying that this would add to the confusion.

The other option would be to simply throw these folks onto the open #ACA exchange market--with the #AmRescuePlan's beefed-up subsidies, it would be awesome to have ~7.4 million newly-subsidy-eligible ACA enrollees flood the market.

However, this would *also* involve millions of people pouring into a system they have no experience with, hunting for the right networks, etc. That's something *all* ACA folks have to deal with, but there's already a lot of confusion re. the new subsidies for *current* enrollees.

Also, the average ACA individual market premium is around $6,900/year apiece ($3,450 for 6 months)...in the same ballpark as COBRA, so if the cost is @MehdirHasan's issue, that'd cost pretty much the same per person.

Again, I'm not a COBRA fan, and I'm not sure that I would've made the same call as the Biden Administration did, but it was a reasonable decision to make given the unique circumstances of the moment...especially given the time factor involved in getting the #AmRescuePlan signed.