COBRA Subsidies Have Expired

Bad news if you’re about to become unemployed: COBRA health coverage is no longer cheap. After more than a year of expanded federal subsidies for COBRA, congress allowed the help to expire on June 1st.

In March of 2009, under the American Recovery and Reinvestment Act, COBRA health coverage costs were cut by 65% with the help of the federal government. This meant that the average family in California only had to pay about $390 for coverage – a far cry from the average cost of around $1,107 before the subsidy (according to a Families USA study).

Now that COBRA help has expired, you’re left with two options for individual or family health insurance:

1. Pay the full cost of COBRA coverage – which is basically the same coverage you received from your previous employer when you worked with them. However, now that the subsidy has expired, you will need to pay the full cost – which currently averages around $1,100 for a family.
2. Opt for an affordable alternative to COBRA. You can request a free quote for health insurance here to see if you can save money with a private alternative.

COBRA Insurance Extension “Unlikely”

Secretary of Labor Hilda Solis said in a statement that “if the [COBRA] extension is not approved immediately, millions of Americans could lose the safety-net programs they deserve and desperately need.” Unfortunately, congress is in a cost-cutting mood, so they’re not likely to extend COBRA subsidies.

CNN estimates that nearly 10 million people are collecting unemployment insurance, and 46% of the 15.3 million jobless Americans have remained unemployed for six months or longer. Despite a comprehensive health reform bill, COBRA coverage remains as expensive as it always has been, and the government is no longer willing to subsidize its costs.

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This entry was posted on Wednesday, June 2nd, 2010 at 11:24 pm and is filed under Health Insurance Politics, Insurance Tips, Unemployment & Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.