COBRA subsidies that paid 65 percent of unemployed workers’ health insurance premium have ended for 7 million unemployed Americans November 30th.  The subsidy which is part of the American Recovery and Reinvestment Act lasts for 9 months from the date that an unemployed worker applies. But the first group of unemployed Americans receiving the subsidies has exhausted the time limit.  Some legislators are working to have the subsidy extended.

Congressional Democrats are pushing to include some type of COBRA subsidy extension in a major jobs bill that’s being crafted. Rep. Joe Sestak, D-Pa., and Sen. Sherrod Brown, D-Ohio, have introduced stand-alone legislation to extend the subsidies in the House of Representatives and the Senate, but it’s unclear how soon any new funding can be secured.

As of now, many families could find themselves paying an average of $722 per month to keep their health insurance coverage via COBRA.  And for many, obtaining private insurance could be cost prohibitive due to pre-existing conditions.  For them, COBRA offers the most cost effective health coverage available for the unemployed.  Unemployed workers depending on unemployment insurance benefits are the most negatively impacted by limited nature of the subsidies.  While the subsidies last 9 months, many workers have remained unemployed for over a year.  If they use their unemployment benefits check to pay COBRA it will take on average 80 percent of their monthly benefits payment to cover the cost without the subsidy.  On the other hand, if they choose to drop their COBRA coverage they could face tens of thousands of dollars in medical debt .

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