Here is an interesting article from the Virginia Pilot on the current COBRA health insurance situation
Congress has little choice but to continue helping laid-off Americans pay for health insurance coverage they originally purchased through their former employers.
The emergency aid is another costly venture among many for the federal government these days. But the alternative — letting the insurance subsidies expire for millions of jobless people and their families — would likely prove far more expensive for taxpayers and far more destructive to the nation’s economic well-being.
In February, Congress included $25 billion in the economic stimulus package to provide up to nine months’ worth of subsidies to laid-off workers so that they could maintain their health insurance plans under a program known as COBRA.
But the subsidies recently expired for the first waves of laid-off Americans to sign up, and several million more will lose the assistance in the next few months unless lawmakers vote to extend the aid.
An extension wouldn’t be cheap, of course. The House and Senate are considering measures that would add another $15 billion for COBRA subsidies. That’s on top of $85 billion worth of extensions proposed for other forms of unemployment assistance.
With the federal deficit already at record levels, no one on Capitol Hill should be eager to dig a deeper financial hole for the nation.
But unemployment is still hovering at 10 percent, and there are precious few signs of a major job expansion on the horizon, even as the nation pulls out of the recession.
With the COBRA subsidies, the unemployed in Virginia pay an average of $377 a month for family coverage, according to Families USA, a research group supportive of health care reform. If the subsidies disappear, the group reports, the average monthly payments will mushroom to $1,078. The numbers are comparable for North Carolina families.
Those struggling with the loss of income won’t be able to absorb those extra insurance costs easily. According to Families USA, out-of-work Virginians and North Carolinians would have to spend about 84 percent of their monthly unemployment benefits on COBRA coverage if there is no government help.
Obviously, that would leave little money for food, housing and other basic expenses. Unless the unemployed are able to find new, affordable sources of insurance — or a new job — they face an untenable choice: Drop their medical coverage or fall behind on other vital financial obligations, like mortgage or rent.
In either scenario, the nation as a whole would end up paying, too — either by picking up medical expenses for the newly uninsured or by taking further hits to a wobbly economy.
Congress has no easy choices here. Lawmakers should try to reduce the expense of the COBRA extensions as much as possible. But, until job growth resumes, the continued aid to American families in need is unavoidable.
