Much to consider about COBRA subsidy law

THERE ARE SEVERAL pros and cons for Congress to weigh when it considers extending the law that temporarily subsidizes COBRA premiums of employees who are involuntarily terminated and want to keep health insurance offered by their former employers.

On one hand, beneficiaries and the federal government are paying only part of the cost of extending the coverage, an extension President Barack Obama backs and has strong bipartisan congressional support.

There is no question that those who opt for COBRA are above-average users of health care services. As a result, claims incurred by beneficiaries typically exceed the premiums paid for the coverage. This means employers are paying part of the cost of COBRA coverage, a fact that legislators have yet to acknowledge.

Still, there are powerful reasons why the subsidy should be extended.

If former employees are able to continue employer-provided coverage, they will receive care if a medical emergency strikes and providers will be paid, reducing the amount of uncompensated care that providers would otherwise absorb and then try to pass on to individuals in insured plans.

If employers start hiring when the economy picks up, beneficiaries who retained COBRA will not have the stress of a mountain of unpaid medical bills when they return to work and likely would be more productive when they're back on the job.