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Update: Cobra Subsidy Extension Approved by House

By Tanya Roth, Esq. | Last updated on

As previously discussed in this blog, many unemployed Americans have been assisted in affording healthcare insurance by the federal Cobra subsidies which began last February. Yesterday, a House vote passed the defense spending bill which includes a COBRA extension, adding another six months onto the original nine month limit for the 65% subsidy. The bill now goes to the Senate for approval, which is expected to vote this week.

Under the 1986 Cobra law, workers who lose their jobs can continue to receive the health insurance provided by their former employers, but must pay the premiums themselves. For many, these premiums are too costly. According to the Kaiser Family Foundation, an average family pays $398 a month in health care premiums with the federal subsidy. The cost rises to $1,137 a month without it.

Although the over-all jobless rate is falling, Bloomberg reports that the number of Americans jobless for 27 weeks or more rose in November by 293,000 to 5.9 million, according to the Bureau of Labor Statistics. Despite these statistics, it is unclear how much extending the subsidy will cost. The Joint Committee on Taxation, a Washington-based nonpartisan congressional committee, doesn't have estimates on how many workers have received the subsidy. The committee had estimated the existing benefit would cost $24.7 billion to cover about 7 million people in 2009.

"This extension is critical to easing the burden on those who have lost their jobs during the economic downturn," said Representative Joe Sestak, (D-Pa), in a statement today. But more importantly, for the future, he hopes that the health bill currently working its way through Congress will eventually eliminate the need for Cobra. That bill may not take effect until 2013.

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