Federal COBRA Health Insurance Subsidy to be Extended Through March
Feb. 26, 2010 – Federal lawmakers yesterday chose the easy route of yet again temporarily extending the federal COBRA health insurance subsidy program for unemployed workers and their families while they spent the majority of their time debating hotly contested federal health care reform measures that would not take effect for several years.
The federal COBRA subsidy program helps workers who lost their jobs due to the recent economic downturn maintain their prior group health insurance coverage without paying the full premium. The federal COBRA subsidy initially lasted 9 months, but with the United States facing its worst job market in decades, an estimated 7 million unemployed Americans began losing their federal COBRA subsidies on Dec. 1. Federal lawmakers temporarily extended the program in mid December, but they once again have become bogged down in health care reform debate – particularly in the wake of Republican Scott Brown’s recent victory in the Massachusetts U.S. Senate race to fill the vacancy left by the recent death of Ted Kennedy.
Having lost their filibuster-proof majority in the U.S. Senate, Democrats and President Barack Obama are exploring ways to implement changes to the $2.5 trillion a year health care industry in the United States. But while searching for ways to push through what Obama has cited as his “number one” domestic policy priority, federal lawmakers balked at making permanent changes to the COBRA subsidy program in favor of simply extending it through April 5.
The extension applies to unemployed Americans currently receiving the COBRA subsidy or who recently used up their 9-months’ of program eligibility. The $787 billion federal stimulus package approved last year allocated funds to help unemployed Americans continue their health insurance benefits through the Consolidated Omnibus Budget Reconciliation Act of 1986 – popularly known as COBRA. COBRA allows unemployed Americans to continue their group health insurance benefits for up to 18 months when they lose their jobs but requires them to pay the full premium – including any amounts their former employers paid to provide the health care benefits.
When federal officials approved the $787 billion federal stimulus package, they included a provision providing a federal subsidy to pay for 65 percent of health insurance benefits extended through COBRA, but the additional benefit would last only nine of the 18 months for which COBRA can last.
American families who recently lost their primary incomes due to unemployment have seen their average monthly health insurance benefits payments rise from about $389 per month while employed to $1,111 per month if choosing to continue them through COBRA, according to the non-profit Families USA organization. A monthly health insurance premium of $1,111 uses up about 83 percent of the average monthly unemployment take-home benefits of about $1,332, according to Families USA.
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