A subsidy for those most in need

Here's a government gift that should keep on giving.

Unless Congress and the president act soon, many unemployed workers and their dependents may lose their health insurance if a federal subsidy to help them pay for the coverage isn't extended.

The economic stimulus package passed in February established an employer-provided subsidy for unemployed workers under the Consolidated Omnibus Budget Reconciliation Act, commonly referred to as COBRA.

COBRA gives former employees the opportunity to temporarily continue their health coverage at their employer group rates. The problem is that many families can't afford the premium, which can be more than $1,000 a month. But under the stimulus plan, workers involuntarily terminated between Sept. 1, 2008, and Dec. 31 of this year were granted the subsidy, through their former employers, to help cover their COBRA premiums for nine months.

Laid-off workers first became eligible in March. Those who take advantage of the program pay 35 percent of the COBRA premium. Employers pick up the remaining 65 percent, which is reimbursed by the government through a payroll tax credit.

For those who signed up March 1, the subsidy terminated at the end of November. Each month that passes without an extension increases the number of people who can't afford coverage, said Ron Pollack, executive director of Families USA, a consumer health advocacy group.

"For millions of laid-off workers and their families, the federal COBRA subsidies have been a health-coverage lifeline," he said during a teleconference.

Legislation to extend the subsidy has been introduced in both the House and the Senate. The House bill, sponsored by Rep. Joe Sestak (D-Pa.), would extend the maximum subsidy from nine months to 15 months. It would also expand eligibility to people who are involuntarily terminated through June 30, 2010, rather than the current cut-off of Dec. 31. Sens. Sherrod Brown (D-Ohio) and Robert P. Casey Jr. (D-Pa.) also want to extend the subsidy to 15 months, plus increase the federal share from 65 percent to 75 percent.

Just before Thanksgiving, Brown and Casey, along with Sens. Al Franken (D-Minn.), Sheldon Whitehouse (D-R.I.) and Robert Menendez (D-N.J.), sent a letter to the Senate leadership urging an extension of the COBRA subsidy.

"It is imperative that we do all we can to limit the rise in the newly uninsured -- and the subsequent increase in uncompensated care and Medicaid enrollment that would surely follow," the senators wrote.

It's important that Congress act soon before people drop their COBRA coverage.

As I read it, the proposed legislation extending the subsidy isn't clear whether it would allow people to return to their COBRA coverage after it has been canceled.