Congrees nixes COBRA subsidies — more workers lose health coverage

Scarce health benefits for unemployed eliminated

The U.S. Congress is forcing many unemployed workers to forgo health insurance. In addition to the millions of working people already lacking health insurance, workers with health insurance from their current employers will have difficulty maintaining their coverage in the event they’re laid off.

A longstanding federal law called COBRA requires employers to continue insurance for former employees, typically for 18 more months — if those workers pay the entire premium plus a two percent administrative fee. Last year, as part of the so-called stimulus bill, Congress approved a 65% COBRA premium subsidy; however, that subsidy ended May 31, and workers using COBRA will have to pay the entire premium themselves. Many won’t be able to do so.

The average price of health insurance for family coverage is about $1,100 a month, according to the U.S. Agency for Healthcare Research and Quality. With the subsidy, COBRA coverage costs $385.

The majority of unemployed workers never qualified for the COBRA subsidy. They either worked for an employer who didn’t provide health benefits or they were tossed out of their jobs before the subsidy went into effect. The so-called health reform act signed into law earlier this year offers little relief. The much-touted extension of health insurance to those currently uninsured allows for those with pre-existing medical conditions to be placed in “high-risk” pools, which will be charged higher rates for their coverage. Also, the new health regulations don’t go into effect until 2014.

Sunday, August 29th, 2010 at 17:05