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Glad Tidings for Jobless With House Passage of COBRA Subsidy Extension

December 18th, 2009 at 01:09 pm



Unemployed workers may get an early holiday gift this year if the Senate votes its approval of the COBRA health insurance subsidy extension just approved by the House.

Without action, the 65% subsidy of COBRA health insurance would expire at the end of this year. By passing the extension of the subsidy for another six months, or 15 months in total, an estimated seven million jobless Americans could see their stress levels eased as the federal government picks up 65% of COBRA monthly premiums.

The COBRA subsidy was originally designed to last for up to nine months for the millions who lost their jobs in massive layoffs between September 1, 2008 and December 31, 2009 and who had an income of less than $145,000 for individuals or $290,000 for families.

Without the subsidy, COBRA coverage eats up 83% of the average unemployment check, pushing many families to drop health coverage altogether, according to Families USA, a consumer healthcare advocacy organization.

The imminent loss of the subsidy for many of the program's earliest recipients last month spurred Congress to scramble before their holiday recess. The subsidy meant that a $1,111 monthly premium for the average family became a more manageable $389 monthly premium, according to Families USA. (Here in Connecticut, I'm paying $173 a month as an individual.)

Even if you've already received the COBRA subsidy for the full nine months and have began paying the full cost of insurance, passage of the extension would mean you could retroactively restore the subsidy for the remainder of the 15-month period.

As Ron Pollack, executive director of Families USA, pointed out, the COBRA subsidy extension is simply a stop-gap measure. "Once health reform passes, this will no longer be a problem," he said, although even if some sort of health care reform is passed, it will not likely go into effect immediately.

The COBRA subsidy extension, which is part of a $636 billion Defense appropriations bill, would also enable workers laid off through February 2010 to be eligible for the subsidy. The Senate vote is expected tomorrow.

The COBRA subsidy is money well spent and a lifeline for many who are just a premium payment away from a healthcare disaster. While billions of taxpayer bailout money benefited car-makers, insurance giants and banks (many of which accepted TARP money even as they stepped up efforts to recoup lost profits from the sub-prime mortgage crisis on the backs of consumers, on the eve of new credit card reform), the COBRA subsidy is helping everyday Americans survive one of the deepest recessions this country has seen.

Do you support extension of the COBRA healthcare subsidy extension?


3 Responses to “Glad Tidings for Jobless With House Passage of COBRA Subsidy Extension”

  1. frugaltexan75 Says:

    That is nice for people who could afford to pay the subsidy after the 9-month period ran out. I knew I wouldn't be able to afford it after 9-months, so decided to not waste 9 months of the 65% only to be without insurance once again.

  2. LuxLiving Says:

    Then, there are people like my Hubster, whose employer went bankrupt. For them? Sadly COBRA is not available. He would have to go into our state's high risk pool at a rate of $1657.00 for just catastrophic coverage for him, and only up to $30,000.00 per incident. No doctor visits, no pharmacy, nada, nothing, zip, zero, etc.

  3. dmontngrey Says:

    From the employee level, yes I do support the subsidy. From the employer level and the administrative side, no. It creates so much work, so many questions, and no one has the answers for you. It's downright impossible to explain this subsidy to someone who has just been laid off, at least in my industry. No one wants to hear it, even if it's so beneficial to them.

    Thanks for the heads up on the possible extension. I was not aware of this development.

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