COBRA Subsidies to Expire

Posted by John LaPlante in Health Care on Dec 1st, 2009 | no responses

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The federal stimulus bill included subsidies for insurance plans purchased under COBRA, a law that lets people hang onto their employer-sponsored health insurance for a period of time after leaving the employer. But at that point, the true cost of insurance becomes explicit for most people, who must pay both the premiums they used to pay as a worker and the “employer’s share.”

The subsidies became, in wonk-speak, premium subsidies, which will soon expire. They’re arguably better than simply putting people who lose their jobs in Medicaid, but they also lock people into one insurance plan–the one they had on the job. And of course policies purchased under the COBRA law, whether subsidized or not, are temporary. That brings home the point that our lawmakers ought to work to make insurance policies personal and portable. Unfortunately, they’re heading in the wrong direction, taking steps that will eventually herd us into a government program.

• COBRA’s a Snake that will Bite