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Archive for Thursday, December 3, 2009

Congress should extend COBRA subsidies

December 3, 2009

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— Here’s a government gift that should keep on giving.

Unless Congress and the president act soon, many unemployed workers and their dependents may lose their health insurance if a federal subsidy isn’t extended.

The economic stimulus package in February established an employer-provided subsidy for unemployed workers under the Consolidated Omnibus Budget Reconciliation Act, commonly referred to as COBRA.

COBRA gives former employees the opportunity to temporarily continue their health coverage at their employer group rates. Many families can’t afford the premium, which can be more than $1,000 a month. But under the stimulus plan, workers involuntarily terminated between Sept. 1, 2008, and Dec. 31 of this year were granted the subsidy, through their former employers, to help cover their COBRA premiums for nine months.

Laid-off workers first became eligible in March. Those who take advantage of the program pay 35 percent of the COBRA premium. Employers pick up the remaining 65 percent, which is reimbursed by the government through a payroll tax credit.

For those who signed up on March 1, the subsidy terminated at the end of November. Each month that passes without an extension increases the number of people who can’t afford coverage, said Ron Pollack, executive director of Families USA, a consumer health advocacy group.

Legislation to extend the subsidy has been introduced in the House and Senate. The House bill, sponsored by Rep. Joe Sestak, D-Pa., would extend the maximum subsidy from nine months to 15 months. It would also expand eligibility to people involuntarily terminated through June 30, 2010, rather than the current cut-off of Dec. 31.

Just before Thanksgiving, Brown and Casey, along with Al Franken, D-Minn., Sheldon Whitehouse, D-R.I., and Robert Menendez, D-N.J., sent a letter to the Senate leadership urging an extension of the COBRA subsidy.

It’s important that Congress act soon before people drop their COBRA coverage. The proposed legislation extending the subsidy isn’t clear whether it would allow people to return to their COBRA coverage after it has been canceled.

Congress has extended programs for folks not in great need. Billions of dollars were allocated for people to buy cars under the Cash for Clunkers program — many cars that the auto research Web site edmunds.com estimates would have been purchased without a federal subsidy.

Our leaders have given away money as part of the first-time homebuyer tax credit to borrowers purchasing homes they could already afford. That program extension was expedited through Congress. And yet a subsidy for people who need the money to continue health insurance isn’t getting the same treatment.

It’s appalling that without an extension, many people have already lost this subsidy just before Christmas and during the middle of the debate on comprehensive health care reform.

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