Congress May Subsidize COBRA Premiums for Uninsured

Democrats and Republicans, although "largely unsuccessful" this year in reaching an agreement on a plan to "bring relief" to some of the nation's 43 million uninsured, have backed a short-term plan based on COBRA, CongressDaily reports. COBRA, a provision of a 1986 budget reconciliation law, allows employees who "have been laid off or otherwise left their jobs" to retain health coverage under their former employers' insurance plans by paying 102% of the premiums. However, premiums under COBRA cost "several hundred dollars per month," which has "kept the program little used," CongressDaily reports. Sens. Ron Wyden (D-Ore.) and Bill Frist (R-Tenn.) have discussed plans to help employees pay the premiums. Wyden said that lawmakers could use federal funding from an anticipated "stimulus" package and the $28 billion allocated in the FY 2002 budget to help the uninsured to help employees cover premiums under COBRA. He added, "The challenge for the Congress on the uninsured is to come up with creative ways to extend that money."

House Ways and Means Committee Chair Bill Thomas (R-Calif.) also has discussed proposals that would allow the government to subsidize COBRA premiums. A Thomas aide said that "no decision has been made" about whether lawmakers would attach the plan to a stimulus package or "move [it] on its own." Rep. Jim McCrey (R-La.) said the House Ways and Means Committee also may propose a plan to allow those ineligible for COBRA -- employees in small firms or those employed by companies no longer in business -- to enroll in public health programs. Kate Sullivan, director of health policy for the U.S. Chamber of Commerce, said that government-subsidized COBRA premiums "will let more people take advantage, and that will help the risk pool." In the past, businesses have expressed concerns about COBRA, pointing out that employees use the program often "are those most likely to need expensive care" (Rovner, CongressDaily, 9/26).