U.S. House Passes 12-Month COBRA Subsidy for Unemployed

 

Saturday, Mar 07,2009, 3:18:17 PM   Click:

U.S. House Passes 12-Month COBRA Subsidy for Unemployed Raymond J Lehmann
The federal government would pick up the tab for 65% of unemployed workers' COBRA health insurance premiums for up to one year, under an $819 billion stimulus package passed by the U.S. House.

Cleared in a 244-188 vote -- which came down strictly along party lines, with no Republicans supporting the measure -- the American Recovery and Reinvestment Act, the House bill allocates more than $30 billion to aid individuals attempting to continue paying health insurance premiums through the 23-year-old Consolidated Omnibus Budget Reconciliation Act program. COBRA allows employees who are terminated or leave their jobs voluntarily to remain in their former employer's group health plan for up to 18 months, which can be extended to 36 months for those with extenuating life circumstances.

The COBRA provisions were supported by America's Health Insurance Plans, AHIP President Karen Ignagni wrote in a letter to Senate Majority Leader Harry Reid, D-Nev. The group had earlier raised concerns about aspects of the bill, H.R. 1, tying $20 billion in health information technology spending to enhanced privacy controls on health plans and other providers.

"Focusing on COBRA improvements at this time will help achieve this goal and, at the same time, address the immediate priority of providing health care assistance to unemployed workers in a timely and efficient manner," Ignagni wrote. "At a time when unemployment is rising across the nation, this assistance will help ensure continuity of coverage and serve as an important lifeline for many workers who do not qualify for Medicaid, but still need help paying their health insurance premiums."

The bill would apply to those who have lost their jobs between Sept. 1, 2008, and Dec. 31, 2009. It also would allow beneficiaries older than age 55 and those who have worked for the same employer for a decade to retain COBRA coverage until they become eligible for Medicare, a provision that drew opposition from the National Business Group on Health, which represents large employers.

"Extending COBRA coverage up to age 65 for former employees 55 years and older or those with 10 years or more tenure is a far-reaching change in health benefits that has not been closely scrutinized," NBGH President Helen Darling said in a statement. "As this legislation moves forward, we strongly urge policymakers to reject this approach and seek workable solutions to preserving affordable health coverage for the unemployed, active workers, and large employers alike."

The Senate is expected to take up its own version of the bill by week's end. A version approved Jan. 27 by the Senate Finance Committee in a 14-to-9 vote would extend the 65% government funding for up to nine months.

(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)

Copyright © 2009 A.M. Best Company, Inc. The federal government would pick up the tab for 65% of unemployed workers' COBRA health insurance premiums for up to one year, under an $819 billion stimulus package passed by the U.S.