Human Resources News & Insights

COBRA subsidy update: Why it wasn’t extended — and what’s next

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On July 22, President Obama signed a bill to extend unemployment benefits through November. But absent from that bill was an extension of the COBRA premium subsidy. Why?

Both Republicans and Democrats acknowledged that they wanted to see the 65% COBRA subsidy — which expired more than two months ago — extended. But the lawmakers from both parties failed to agree on how to pay for it.

The GOP suggested using funds allocated to economic recovery. The grounds? Obama’s stimulus packages have either failed or the money’s not being spent, Republicans said.

The Dems, on the other hand, wanted to borrow more money to pay the billions needed to extend the subsidy. But the GOP feared more borrowing would send the ballooning federal deficit spiraling further out of control.

What next?

As congressional lawmakers prepare for the November elections, many hope to keep the focus on legislation that’ll create jobs and assist the unemployed — and that could spark further action on the subsidy.

But as more time goes buy, it could prove increasingly difficult to resurrect the expired program.

We’ll keep you posted.

Should the COBRA subsidy be extended along with other unemployment benefits? Share your thoughts in the Comments Box below.

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Comments

  1. Joe Pitt, a Republican Representative from Ohio has introduced legislations to create a kind of health care savings account for COBRA. It’s called the COBRA Affordability Act. You can save money tax free to pay for COBRA benefits. While it would be of little help to the currently unemployed and uninsured, it might provide a small amount of help in the future. (I have my doubts – Imagine any middle class family who has an extra amount of money to put aside in the event they have to pay for COBRA in the event they find themselves unemployed. It’s hard enough just putting money into a normal rainy day account.)

  2. By all means it should be extended! It was the ONE program Washington got right! This made it possible for the unemployed to keep health insruance (what Obama said he wanted for all Americans) and it was affordable!!!!

  3. Marylou K says:

    All sounds well and good about the creation of new jobs, but the majority of new jobs created by this administration have been government jobs. Those of us who do not work in the protected government system of jobs do not see this as good new of any kind.

    I agree that no more borrowing, no more spending money as if it was unlimited, with the answer of let’s just print more! Between the rampant spending, the out of control extension of unemployment benefits, the deterioration of our health care programs…this country of ours is set to implode. How much more can the middle class support?

    I am all for creating jobs, and all for bringing back manufacturing to America. We no longer make anything, we no longer create anything, we no longer encourage new business. What a shame and what a waste of opportunity!

  4. This program needs to be extended– at least through 2010. Our unemployment rates have not gone down significantly, and it is a program that has allowed individuals who have lost their jobs to keep some health insurance coverage for their families. It has been one of the more effect programs of the economic recovery programs. They should also look at lowering the medicare age to 62, that would allow those older workers who have been laid off to tranistion to medicare. This will be the last group to get jobs because of their age.

  5. I think the subsidy was a great idea and it allowed many of our laid-off staff to continue with health insurance coverage that they could not have afforded otherwise. With all the waste in government, surely there’s someplace to find the funds to continue this helpful program. It won’t help me, unfortunately, since the company is now closing down and there’s no underlying insurance plan on which to base COBRA, but it’s still a good program and should be funded.

  6. Monica Stowell says:

    No the COBRA subsidy and unemployment should not be extended. There are too many people taking advantage of this who are perfectly capable of getting back into the workforce. Help should be given to those who need it, but a blanket extension for all creates an abuse and overwhelming added expense on the American taxpayers who are working and just scraping by.

  7. If you have not been unemployed Monica (in the comment shown on here) you do not realize how difficult it is to get a job with health insurance benefits. It is a bitch!!

    I have a Bachelor’s degree and my husband has a BS and a Masters Degree. We are now both unemployed and constantly looking and applying for jobs. We still have not found anything with benefits. We can find “basic” employment, but nothing more. It completely sucks!!

    I hope some of you “know it all” people lose your jobs and see just how hard it is to turn around this situation.

  8. To Lynn : I read your response to Monica, and where I understand why you say this, we have to remember the comment in the first place. It takes such ignorance to share such a comment as Monica did. Obviously, she has not experienced what those laid off, no fault of their own, have. Just speaks about taxpayers working and just scraping by, what does she think we did before we were laid off? I have worked everyday since the legal age of 15. I have paid taxes, and worked my way up. I went into work one day, just like any other day, and was told I was being laid off. They wouldn’t even let me collect my things. I was escorted out; along with many others, many who had been with this company for 20 plus years. Why did they lay us off? As they stated: “Simple, why would we pay you so much more when we can pay workers in India so much less?” And I am not exaggerating when quoting that. I have looked and looked and looked. My cobra subsidy is almost done, and I am getting so worried. I have type 1 diabetes, rhumatoid arthritis, and hypothyroidism. I, for obvious reasons, can not be with out health insurance. My prescriptions each month only would cost me roughly $4000. So I am very scared right now. And you think its me taking advantage??? Really?? I have lost my home, had to move in with relatives. It really hurts to see the lack of support from our follow Americans. And it just comes from the lack of knowledge. So Lynn, I, myself, do not hope for these ignorant people to lose their jobs… I hope they take a look around them and see what IS going on in our country, and then maybe show some support to their follow Americans in need.

    Kristen

  9. I just got caught up in a massive lay off about three weeks ago. Last week I received my first cobra bill. Over $1200 to cover my family. That is a crazy amount of money. I have two small children and cannot in any way be without coverage for them. I have sent out more resumes than I care to count, I’m meeting with agents and employers whenever possible, and I am not in any way sitting back to take advantage of this little vacation. I am filled with guilt for not having a job to go to, I’m scared of what this will do to us financially, and I am full of wonder that there are actually still people out there who are so arrogant to think that this same situation couldn’t happen to them. For anyone who says this program should not be extended, I am guessing you are either completely financially secure on your own. Either that or good luck hanging on to that lovely job of yours. Otherwise you too may need to wish that this useless excuse for a government might find a way to actually help instead of hinder the American public.

  10. Monica, you’d better hope you are never in the position of losing your job and not being able to find another immediately. If that happens to you, you will not be able to afford COBRA — it’s way more expensive than most people think it will be. But hey, maybe you can find a low-paying job in retail or manufacturing, with no benefits, and then you won’t even be able to afford your mortgage payment, let alone COBRA premiums. Many of those who are unemployed are certainly ‘capable’ of getting back into the workforce — if only they could find the jobs. My company has laid off 47 people in the past year — and we only had 53 to start with! Most of those former employees have sent out hundreds of resumes and applied for hundreds more jobs — but when there is one opening and 1,217 applicants, your attitude becomes abhorrent.

  11. I agree with RandiG–I think it should have been extended. Economic recovery is not right around the corner. The subsidy helped those who really needed health insurance to afford it. It was not free–just put it within reach.

  12. Monica Stowell says:

    To those who have commented on my comment, I think you have misinterpreted my intent. As I stated, help should be given to those who need it. I do hope I never lose my job as I too have a family and need my job to support them. I would not wish that on anyone and shame on you for wishing it on me. I mean nothing bad to anyone in that situation. My comment was that government needs to look deeper into these issues and not implement these blanket solutions. They may help those who need it, and that is great, but they also help create abuse by those who may not need it. We need to look closely at the problem, whatever it may be, and find the right solution for each situation. I work in employee benefits and deal with health insurance benefits all the time. I have seen both sides. I have had employees angry because the health insurance premium went up so they get their kids on government programs. I am amazed they even qualify because they make a decent salary, but they do. Yet, there are others who barely make enough to get by and they cannot get insurance help. If they get a small raise, the government kicks them off the insurance. Do you know how many times I hear them say “it doesn’t pay for me to work?” They work hard and get penalized for making a little more. Yet there are those who don’t bother working at all because the system takes care of them. I am not saying this is any of you. I am just saying this is what creates the abuse. And what about the employee who is let go because they are doing inappropriate things at work. They can stay on COBRA, get unemployment extended and get retrained all via government subsidities. They will end up with a better job than I have even though I have been the one plugging away trying to make ends meat, fending off creditors (like everyone else because I have not gotten a raise–due to the economy–and expenses have gone up). The economy is rough not only for those out of work, but also for those working and barely getting by. We all need help. I’d like to see the real problems solved.

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