Laid-off workers start losing COBRA subsidies

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.

Josh Richman

Josh Richman covers state and national politics for the Bay Area News Group. A New York City native, he earned a bachelor’s degree in journalism from the University of Missouri and reported for the Express-Times of Easton, Pa. for five years before coming to the Oakland Tribune and ANG Newspapers in 1997. He is a frequent guest on KQED Channel 9’s “This Week in Northern California;” a proud father; an Eagle Scout; a somewhat skilled player of low-stakes poker; a rather good cook; a firm believer in the use of semicolons; and an unabashed political junkie who will never, EVER seek elected office.