The COBRA tax credit is another example of why  government solutions to the problem health care coverage will fail and probably add to the  government created problem.    COBRA is simply a way of giving people who are laid off the "opportunity" to pay for the gold plated employer based health plan out of their own pocket, a health plan that would not be so gold plated if not for the third party approach to coverage and the rich tax subsidies supporting such a system and the political interests sustaining it.   Would people pay for such a turkey in the free market?  Of course not.  Not even at half the cost.

Uncertainty over new health safety net for jobless

WASHINGTON – The Obama administration rushed to include a health care safety net for laid-off workers in the recently signed stimulus bill, but has not told employers exactly how to make it work.

As a result, tens of thousands of jobless people could wait months before getting help paying for health insurance that their employers previously had covered.

"Too many people are still trying to figure this out," said Heath Weems, director of human resources policy at the National Association of Manufacturers. "There is a lot of confusion."

At issue is the program called COBRA, the acronym for the law that allows workers to keep their company's health insurance plan for 18 months after they leave their job, if they pay the premiums.

The policies are so expensive that only a minority of eligible workers sign up, often those with medical conditions that demand attention. Costs for a family of four can top $1,000 per month."

You betcha.

As Peter has noted, divide $700 billion by the real number of the uninsured -- 20 million --  over ten years or better, $70 billion a year by 20 million you get $3500 per person.  So why not give people a tax credit  and let insurers, health care agents, etc provide a product from scratch that offers insurance coverage that automatically enrolls people, is universal, portable guaranteed issue of some sort, incentives for healthy behavior, a rider that people would pay that would cover out of catatstrophic out of pocket expenses and encourage pre-funding of deductibles via HSAs through employers, direct deposit. etc.    Compare that to the unworkable effort to extend COBRA and all it's complexities....and COBRA is so expensive precisely because the health plan it is "replacing" is unfairly subsidized by lower income Americans in favor of health care plans like those that are bankrupting GM and Chrysler.  

How to pay for it?  End the system that creates the COBRA like plans in the first place and give people a chance to design plans that they truly value with their own money.   Encourage more personal responsibility for health.  Provide doctors and patients with information on real comparative effectiveness information, information on what health technologies and treatments are best for them, not guidelines twisted by any one interest as Roy Poses of the www.hcrenewal.blogspot.com/  has noted.  (Yes, I agree with Roy on this emphatically!)   More on this in future post.