As COBRA subsidies go away today, so does coverage…

As described in an article by Bobby Calvan in the Sacramento Bee on Sunday, and in other papers, today, December 1st, many of the millions of laid-off workers and dependents who received federal subsidies to help pay for health care coverage will lose those subsidies and may join the ranks of the uninsured, according to a report issued today.

The report, by the consumer health organization Families USA and co-released by the statewide health consumer coalition Health Access California, states that the subsidies – which were started last March by the American Recovery and Reinvestment Act (ARRA), but were made available for only nine months – have enabled millions of laid-off workers and dependents to afford so-called “COBRA” premiums needed to continue health coverage from their previous employer.

Under the ARRA, the federal subsidies pay 65 percent of the cost of COBRA premiums. In California, the federal subsidies for COBRA family coverage average $720 per month.

Without subsidies, the report finds, COBRA premiums for family health coverage will cost laid-off California workers, on average, $1,107 per month – 82.1 percent of the average ($1,349) monthly Unemployment Insurance checks they receive.

For the first recipients, who began receiving subsidies in March, the subsidies will expire on November 30. For those who started receiving subsidies after March, the expiration will be nine months after their start-up date.

For millions of laid-off workers and their families, the federal COBRA subsidies have been described as a health-coverage lifeline. Health advocates are arguing that new jobs legislation extends those subsidies.

Health and consumer advocates noted that pending health reform legislation would provide a permanent source of help to laid off workers. The health reform bills pending in Congress would enable laid-off workers and their families to obtain health coverage through a newly created marketplace, called an “exchange,” and families with low incomes would receive tax-credit subsidies to help pay the premiums.

Health advocates are urging Congress to extend the COBRA subsidy as a much-needed measure in the present to protect recently laid-off workers and their families. But, they say, this issue shows the dire need for health reform moving forward, so nobody loses health coverage when he or she switches jobs or becomes unemployed looking for work.

The Congressional Budget Office and Joint Tax Committee estimated that approximately 7 million adults and dependent children would receive the COBRA subsidy in 2009. The Treasury Department is compiling data about how many workers received the subsidy, but a count of the people benefiting from the subsidy is not yet available.

The data for the Families USA report were derived from federal sources in the Departments of Labor and Health and Human Services. A more detailed description of the sources of the data is set forth in the report’s methodology section.

Health Access California promotes quality, affordable health care for all Californians.
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