H.R. 3590 Largely Ignores COBRA Subsidies for Displaced Workers

Irvine, Calif. -- Until I hit the milestone age of 40, I rarely gave health insurance a second thought. As a reasonably healthy, single man, I had about the same attitude toward health care as the Black Knight in the classic comedy "Monty Python and the Holy Grail." After another warrior severed his arm with a sword, the Black Knight simply dismissed it as a "flesh wound."

After I turned 40, however, I transformed from the Black Knight into "Brave" Sir Robin. Health problems made insurance co-pays and primary care physicians a big part of my life. That's one reason why I had mixed feelings about the passage of H.R. 3590, also known as the Patient Protection and Affordable Health Care Act. President Barack Obama signed this bill into law on Tuesday, March 23, but as a contract worker, H.R. 3590 will not benefit me in the short term.

Living with a COBRA in the house

Like H.R. 3590, the Consolidated Omnibus Budget Reconciliation Act (COBRA) was considered groundbreaking legislation back in the 1980s. For workers who lose their jobs, COBRA offers the option to continue their existing group health coverage, but at 102 percent of the full premiums. If you'll pardon the pun, the COBRA rates traditionally have been a real bite.

After my consulting contract abruptly ended last May, I began paying COBRA premiums for the first time in my adult life. Fortunately, the brand-new American Reinvestment and Recovery Act of 2009 (ARRA) contained provisions for lower COBRA rates and a longer benefit period. Those provisions allowed me to fill prescriptions and see my primary care physician during my long job search without going broke.

Although I am back on contract with a firm in Southern California, I still pay my subsidized COBRA premiums each month. Under the current ARRA provisions, however, my benefits will run out in September of this year.

H.R. 3590 largely ignores COBRA

Those of us who began our COBRA benefits under the American Reinvestment and Recovery Act have been listening to the clock tick down on our subsidies. A recent "BusinessWeek" article pointed out that workers who lose their jobs before April 1 may enjoy up to 15 months of COBRA subsidies, but after that, the premiums truly get scary. When my time is up, for instance, my monthly premium will jump from $164 to $500.

In the rush to get the Patient Protection and Affordable Health Care Act pushed through Congress, both the House and Senate appear to have shelved the COBRA problem. In December 2009, Congress did pass legislation to extend COBRA benefits, but the clock still is ticking down.

Assistant Secretary of Labor Phyllis Borzi wants to extend COBRA subsidies

In the days following the passage of H.R. 3590, there has been some encouraging news on the COBRA front, however. In the same "BusinessWeek" article mentioned above, Assistant Secretary of Labor Phyllis Borzi is quoted as saying she wants to see COBRA subsidies extended through December 31, 2010. That's good news and a step in the right direction, but Congress does need to help those of us on COBRA survive until the provisions of H.R. 3590 really start to work.

Resources:

http://www.dol.gov/dol/topic/health-plans/cobra.htm

http://www.iowamedical.org/news_detail.cfm?newsID=299

BusinessWeek, "COBRA Subsidy May Be Extended Through End of Year," Margaret Collins and Jeff Plungis