COBRA Subsidy Recipients May Get 2-Month Extension

Posted in Health Insurance , Medicaid

December 17th, 2009

The House planned to vote on Wednesday on measures that would help provide a safety net for the unemployed and a COBRA extension was to be among the measures. If the extension was approved, it would provide a subsidy to beneficiaries for an additional two months.

About the COBRA Subsidy

For more than a year, workers who had been laid off as a result of the financial crisis were offered a discount if they choose to extend their employer-sponsored health insurance benefits with the help of COBRA. Typically, the benefits would be quite expensive to maintain; however, the government offered these workers a subsidy that helped discount the monthly premium by 65 percent. However, this subsidy is set to expire on Dec. 31, 2009.

How the Extension Could Help

If Congress approves the extension, those who have been utilizing COBRA to pay for their health insurance would receive an two-month extension for the 65 percent subsidy. Additionally, workers may receive help with other jobless measures, including the continuation of a stimulus-funded $25 boost in unemployment benefits, as well as more money for food stamps.

While the cost of the batch of extensions would cost the government roughly $13 million, not making the extensions would mean nearly 3 million would be out of vital assistance.

In the meantime, the House is working on a job creation package that could possibly extend COBRA benefits for an additional six months, which would lengthen the subsidy assistance from 9 to 15 months total per recipient. Also, the package would provide more Medicaid money to those in need.