Extending the 65 percent federal subsidy for COBRA is unlikely because Congress is in recess, with little time left in the session, and members vying for re-election in November would face charges of expanding the federal deficit.
Before Congress approved the subsidy in Feb. 2009, about 19 percent of the eligible newly unemployed took advantage of COBRA, compared with 39 percent afterwards, according to surveys of large employers by Hewitt Associates. The change was less dramatic for workers laid off at smaller companies.
Laid-off employees and their families can get COBRA coverage, which typically lasts 18 months, if they pay the entire premium of their employee coverage plus a 2 percent administrative fee, which can be an impossible sum for families with virtually no income. The average price for family coverage is about $1,100 a month, according to the U.S. Agency for Healthcare Research and Quality.
However, critics of the COBRA subsidy said it was unfair to people who lost their jobs before it went into effect or those laid off at companies with fewer than 20 employees. Under federal law, smaller companies do not have to provide COBRA, but most states require them to provide the coverage.
Read the Kaiser Health News report on COBRA insurance.
Read More Becker’s coverage on COBRA insurance
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