COBRA Subsidies for the Unemployed: How Are They Working?

eAlert f4d01915-2d98-4aae-a574-6f9c8d00d2f7

<p>In February 2009, Congress created a temporary but important new subsidy for unemployed workers' health insurance: it funded 65 percent of COBRA health insurance premiums for workers laid off between September 2008 and December 2009 to allow them to continue their workplace coverage for up to nine months. Through legislation signed on December 19, the subsidies were extended to the end of February 2010 and increased to 15 months' duration.</p>
<p>In a <a href="/publications/issue-briefs/2009/dec/cobra-subsidies-laid-workers-initial-report-card">new issue brief</a> published jointly by The Commonwealth Fund and the California HealthCare Foundation, researchers Randall R. Bovbjerg, Stan Dorn, Juliana Macri, and Jack A. Meyer report on initial experiences with the new subsidies. They find that enrollment in COBRA coverage has increased substantially since the subsidies took effect, with a healthier mix of individuals enrolling in COBRA than before. Moreover, higher "take up" of COBRA helps reduce uncompensated medical care and likely some Medicaid enrollment, "creating at least a measure of offsetting savings at multiple levels of government," the authors say.</p>
<p>Still, many of those who are eligible cannot afford to purchase COBRA coverage, even with the 65 percent premium subsidy. Very high subsidies and very easy enrollment processes are likely needed, the researchers note, to enroll most newly unemployed people who lack another source of affordable coverage.</p>
<p>Congress is likely to revisit COBRA subsidies before the recent extension expires at the end of February.<br /></p>