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Laid-off workers start losing COBRA subsidies

By Josh Richman
Tuesday, December 1st, 2009 at 10:05 am in economy, healthcare reform.

Many of the millions of laid-off workers and dependents who were getting federal subsidies to help pay for health care coverage are now losing those subsidies and so might end up joining the ranks of the uninsured, according to a report issued today by two health-care advocacy groups supporting Democratic reform plans.

The report by Families USA, co-released by Health Access California, notes subsidies started last March under the American Recovery and Reinvestment Act economic stimulus were made available for only nine months, so the first round of recipients saw their subsidies expire yesterday.

These ARRA subsidies pay 65 percent of the cost of COBRA premiums needed to continue health coverage from laid-off workers previous employers; in California, federal subsidies for COBRA family coverage average $720 per month.

Without subsidies, the report says, laid-off Californians will face COBRA premiums averaging $1,107 per month; that’s 82.1 percent of the average $1,349 monthly unemployment insurance checks they receive.

“When workers lose their jobs, they often lose their health coverage as well,” Families USA Executive Director Ron Pollack said in a news release. “For millions of laid-off workers and their families, the federal COBRA subsidies have been a health-coverage lifeline. It is essential, therefore, that new jobs legislation extends those subsidies.”

Pollack also noted health-reform bills now pending in Congress would let laid-off workers and their families get coverage through a new marketplace called an “exchange,” and families with low incomes would receive tax-credit subsidies to help pay the premiums.

The Congressional Budget Office and Joint Tax Committee estimated that approximately 7 million adults and dependent children would get 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 Families USA report was based on Labor Department and Health and Human Services Department data.

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  • dprosenthal

    After all the terrible waste of tarps, stimuli, bail-outs, etc. – this is a situation in which the gov’t SHOULD step in and provide financial aid. These are not people who chose to live on welfare or to spend the money they earn on luxuries rather than buying insurance. Laid-off workers are victims of a failing economy, more than willing to work to provide for their families as soon as the jobs become available. How much better for our tax dollars to help deserving Americans than providing hugh bonuses on top of huge salaries to executives who obviously failed
    to do an adequate job in the first place.

  • John Hatfield

    I was laid off from my job after 3 years of success in april 2009. I had surgery for cancer in January 2009 and will have no insurance after January if I still cannot find a job. My cancer could reappear anytime now and I would not be able to get insurance even if I could afford it. So, I am facing potential death due to political ideologies and an intangible concept called “money” having greater value than human life in our American contemporary society. Criticize the evils of “socialism” all you want but a society who will willingly allow fellow citizens who have been unfortunate enough to become seriously ill at a time of deep financial recession to have no health care makes a mockery of all the feigned patriotism to victims of 9/11 or anything else. It is the LIVING americans who we need to have compassion for and spend mney to help, not the dead. Nationalism, patriotism, religionism, and all the other “isms”aside,what is a life; mine, yours, anyone’s worth. Such a society that is totally careless of life I have no regrets in leaving.