WASHINGTON — One of the key consumer benefits of the federal stimulus package — subsidies to help laid-off workers continue their health care coverage — draws to a close today, raising concerns about how the unemployed will cover those expenses.
It's a dilemma that Holly Jespersen knows firsthand. She lost her job twice in the past two years — both times losing her employer-paid health insurance. But the second time, she paid about $350 a month more for insurance than she had the first time because she didn't qualify for the subsidy. "It made a huge difference for me," said Jespersen, 36, of Darien, Conn. "I wish I still had it."
Jespersen was one of millions of laid-off workers to benefit from the federal subsidies for COBRA, a program set up under federal law that allows people who lose their jobs to keep the employer-provided insurance, typically for 18 months, if they pay the entire premium plus a small percentage for an administrative fee.
In February 2009, at the height of the economic downturn, Congress first approved a 65 percent subsidy for COBRA premiums to help those who had been laid off starting in September 2008. While Congress extended the COBRA subsidy three times to cover workers who lost their jobs through May 2010, lawmakers last year resisted another extension amid rising concerns about the federal budget deficit. Because the subsidy lasted for up to 15 months, the last people to take advantage of the savings lose that help starting Thursday.
Joseph Antos, a health policy expert with the American Enterprise Institute, a conservative policy research center, said the subsidies were not extended because policymakers needed to curtail spending. "Is it related to Republicans' and Democrats' interest in getting control of the deficit? Absolutely," he said.
Consumer advocates this week lamented the end of the subsidy, saying it will add to the burdens of people losing work.
"COBRA is a critically important benefit for people who lose their jobs," said Ron Pollack, executive director of Families USA. "Unfortunately, it is a benefit that is unaffordable for the overwhelming majority of laid-off workers — and that's why the end of COBRA subsidies will make continued health coverage impossible for their families."
Studies vary on just how many people were helped.
What is not disputed is that the COBRA subsidy made a big difference in the price of coverage. The average price for family coverage is about $1,137 a month, according to the Kaiser Family Foundation. With the subsidy, COBRA coverage costs an average of $398.