[Congressional Record (Bound Edition), Volume 145 (1999), Part 9]
[Extensions of Remarks]
[Pages 12937-12938]
[From the U.S. Government Publishing Office, www.gpo.gov]



           HEALTH INSURANCE ASSISTANCE FOR THOSE 55 AND OLDER

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                         Tuesday, June 15, 1999

  Mr. STARK. Mr. Speaker, in the 104th and 105th Congresses, I 
introduced legislation to provide assistance in obtaining health 
insurance to those 55 and older. Today I rise again to introduce 
legislation that will help many individuals who find themselves without 
health insurance as they enter the later stage of their lives.
  The COBRA Extension Act for 55-to-65 Year Olds extends the COBRA 
health continuation program to cover more individuals between age 55 
and when they become eligible for Medicare at age 65. Under current 
law, individuals can keep COBRA coverage for 18 to 36 months, depending 
on the circumstances. That means that a person can be laid off from his 
or her job, receive 18 months of COBRA, and then find him or herself 
running out of COBRA coverage at age 55 with only limited, and 
expensive, places to turn for other health coverage.
  One option available to these people is to find an individual health 
plan in the private market, but the cost of doing so is extremely 
prohibitive. Rates and availability of coverage in the individual 
market vary widely, with a person's health, age, and other factors 
being taken into account. For those in their 50's and 60's, there are 
large disadvantages and huge expenses in trying to obtain individual 
coverage since most insurance premiums rise sharply with age or pre-
existing conditions.
  For example, in the San Francisco market, Blue Cross of California 
offers a basic, barebones in-hospital plan with a high deductible in 
the range of $2,000. For a couple under age 29, the cost is $99 per 
month. But the cost soars to $389 for a couple between 60

[[Page 12938]]

and 64. This is an outrageous fourfold increase in insurance rates for 
the older couple--and it is by no means a comprehensive policy.
  Group health insurance is much less expensive than individual policy 
insurance, and that is why the current COBRA benefit is so vital and 
useful. The difference in annual cost for obtaining group versus 
individual health insurance can easily be several thousand dollars.
  Under current COBRA rules, people age 55 and over who are reaching 
the end of their COBRA coverage and who cannot afford to enter the 
private market face the prospect of being without health coverage for 
up to 10 years--until the time they are eligible for Medicare. At that 
late point in their careers, the task of finding a new job with 
employer based health coverage can be close to impossible. Some people, 
such as widows receiving coverage through their late spouse's employer, 
may need to re-enter the workforce for the first time in years.

  Unfortunately, many near-elderly individuals have faced this 
situation in the recent past. Increasingly during the 1990s, losing 
one's job due to downsizing and lay-offs has created a gap in health 
insurance coverage for individuals over age 55. More near-elderly 
individuals may face the frightening reality of this situation as the 
number of people between the ages of 55 to 65 nearly doubles, from 23 
million today to 42 million by the year 2020.
  There exist numerous examples that help demonstrate the significance 
of the situation to older workers:
  At AT&T, 34,000 jobs had to be cut in 1997. This is down from the 
original prediction of a cut of 40,000 jobs, but still a significant 
number. Workers were to receive a lump sum payment based on years of 
service, up to one year of paid health benefits and cash to cover 
tuition costs or to start a new business--but what happens to health 
coverage after one year?
  Two giant New York City banks, Chase Manhattan and Chemical recently 
combined and 12,000 jobs from the combined banks were subsequently cut.
  Last year, Massachusetts-based Polaroid reduced its workforce by 
seven percent, cutting over 2,400 jobs.
  In December 1998, Citicorp announced it was slashing 10,400 jobs, six 
percent of its total workforce.
  All in all, over 625,000 jobs were eliminated in 1998.
  When the near-elderly lose their jobs in this manner, too often the 
unfortunate consequence is that they and their spouses also lose their 
health insurance coverage.
  In order to assist these individuals over age 55 in maintaining 
health coverage, and provide an option for them that is better than 
entering the individual market, my bill modifies the current COBRA law 
by extending COBRA coverage until the age of Medicare eligibility for 
individuals who are age 55 or older at the time that their COBRA 
coverage would expire under current law.
  Under this formulation, the maximum coverage available would be 13 
years--a spouse who begins her 36 months of coverage at age 52 would 
then begin coverage under this bill at age 55 and be guaranteed health 
coverage until the point she becomes eligible for Medicare.
  In order to compensate employers for the cost of this new COBRA 
continuation coverage, my bill calls for age-55+ enrollees receiving an 
extension of their COBRA benefits to pay 125 percent of the group rate 
policy (compared to 102 percent for most current COBRA eligible 
individuals and 150 percent for disabled COBRA enrollees). This 
provision recognizes the fact that this age group is more expensive to 
insure and compensates business accordingly.
  I realize that the cost of paying one's share of a group insurance 
policy will still be too much of a burden for a number of Americans. 
Many of them will be forced into the uncertain mercies of State 
Medicaid policies. But for many others, this bill will provide an 
important bridge to age 65 when they will be eligible for Medicare.
  While we are taking other steps to resolve this burgeoning problem, 
this step is crucial to any long-term resolution. As greater numbers of 
baby-boomers enter their mid-to-late 50s, it becomes even more apparent 
that we need to act now. We cannot allow our early retirees and their 
spouses to be left without this important option for health coverage. I 
look forward to working with my colleagues to enact the COBRA Extension 
Act for 55 to 65 Year Olds.

                          ____________________