Restore COBRA Aid Extension in H.R. 4213

In the seemingly never ending saga of getting a bill passed to continue the extended federal unemployment insurance programs — one that has been going on now for four months — the Senate has returned to take up H.R. 4213 yet again.

But the bill they have before them lacks the previous provisions to extend the federal COBRA premium subsidy, those provisions having been removed two weeks ago in the House.

As I reported last week, the version passed by the House before the Memorial Day recess was a clear indication that we had reached a dangerous crossroads in the effort to aid those hardest hit by the Great Recession and provide a foundation for a job market recovery.

The COBRA subsidy, originally included in the Recovery Act and since extended several times, provides for reduced premium payments for up to 15 months for those who qualify and wish to continue health insurance coverage with their former employer’s plan. Since the employer no longer contributes to the premium payments, the COBRA subsidy picks up 65% of the monthly premiums, allowing the unemployed to maintain at least some semblance of affordable coverage.

According to Ron Pollack, executive director of Families USA, on average the monthly COBRA premium for a family would be $1,107 nationally. The average monthly payment from unemployment insurance is $1,313. Without the COBRA subsidy for the unemployed, COBRA premiums would gobble up an average of 84 percent of unemployment benefits. In a number of states, the average COBRA premiums are actually higher than the average unemployment payments.

Unless the COBRA subsidy is restored in the bill, private insurance companies would be able to suck up huge chunks of many jobless workers’ unemployment payments, despite the recent passage of health care reform.

Unless the COBRA subsidy is restored in the bill, the ranks of the uninsured would swell dramatically, despite the recent passage of health care reform.

Senator Robert Casey (D-PA) has an amendment to restore the COBRA provisions to H.R. 4213. Here’s the announcement from Sen. Casey:

Amendment to Reinstate COBRA Premium Assistance

WASHINGTON, DC—U.S. Senator Bob Casey (D-PA) and Senator Sherrod Brown (D-OH) were joined by fourteen other senators today in introducing an amendment to the American Jobs and Closing Tax Loopholes Act of 2010 that would reinstate the expired COBRA health care premium assistance for laid off workers.

“Millions of Americans have been hard hit by the recession and lost their jobs through no fault of their own,” said Senator Casey. “Unfortunately, some people in Washington want to pull up the ladder and take away help for these struggling families. Not extending COBRA premium assistance will hurt hundreds of thousands of people in Pennsylvania and across the country and it will add further strain on our recovering economy.”

“We need to prevent unemployed workers for joining the rolls of the uninsured,” Brown said. “When there are few jobs to be had, the inability to afford COBRA premiums becomes an even more acute problem. I’ve received letters and emails from Ohioans who describe how COBRA is more expensive than rent or food. That’s why we need to extend this subsidy for workers who have recently lost their jobs.”

The COBRA assistance expired on May 31st. The Casey-Brown amendment would extend the program through November 30, 2010.

The amendment to extend COBRA premium assistance is also cosponsored by Senators Pat Leahy (D-VT), Carl Levin (D-MI), John Kerry (D-MA), Tom Harkin (D-IA), Daniel Akaka (D-HI), Ron Wyden (D-OR), Frank Lautenberg (D-NJ), Jack Reed (D-RI), Debbie Stabenow (D-MI), Sheldon Whitehouse (D-RI), Mark Begich (D-AK), Roland Burris (D-IL), Kirsten Gillibrand (D-NY) and AL Franken (D-MN).

In addition, Senators Casey and Brown also sent a letter to Majority Leader Harry Reid (D-NV) and Finance Committee Chairman Max Baucus (D-MT) urging support for an extension of COBRA premium assistance. This letter was also signed by Senators Leahy, Levin, Chris Dodd (D-CT), Arlen Specter (D-PA), Kerry, Harkin, Barbara Mikulski (D-MD), Akaka, Wyden, Reed, Stabenow, Lautenberg, Bob Menendez (D-NJ), Whitehouse, Ted Kaufman (D-DE), Gillibrand, Begich, Franken and Burris.

Without the extension of the COBRA Premium Assistance Program a report from the National Employment Law Projects predicts as many as 150,000 Americans each month will lose out on the subsidies necessary to afford quality healthcare.

A study by Families USA shows that 4 million Americans, including 98,500 Pennsylvanians lost their employer-based coverage due to job loss in 2009.

The average cost of COBRA family coverage is three-quarters of monthly unemployment benefits in Pennsylvania and 40 other states. In some states, health premiums actually cost more than monthly unemployment benefits, slowly driving families further into debt.

Call your Senators toll-free at 888-254-5087 and tell them to support the Casey amendment to H.R. 4213 to restore the COBRA premium subsidy for unemployed workers.

And, since the amendment will almost certainly face a 60 vote threshold, the votes of the following Senators will be particularly critical:

Bayh (IN)
McCaskill (MO)
Nelson (NE)
Webb (VA)
Warner (VA)
Brown (MA)
Voinovich (OH)
Snowe (ME)
Collins (ME)

Make those calls now… then come back and I’ll run down some more on the bill:

Also cut short in the House bill was the date of the federal unemployment program extension to November 30 from December 31. The Senate’s version maintains that eligibility expiration, so that those who became jobless from December of last year through May of this year and exhaust their 26-weeks of regular state unemployment would still be eligible. That, of course, is assuming the bill passes, which is not a certainty. At the same time, the November 30 date means that newly unemployed workers, those who lose their jobs through no fault of their own after May 31 will only be eligible for the regular 26-weeks of state benefits.

Initial claims for state unemployment benefits are still averaging nearly 460,000 a week, nearly 40 percent more than when the recession began. Those claims, as well as continuing claims, had been declining consistently but have recently flattened out.

MayInitClaims
source: Paper Economy
Click here for a large format interactive version.

With many employers still laying off workers and a still anemic job market, newly unemployed workers will be facing a shorter period of benefits coverage even as long-term unemployment continues to soar. The average duration of unemployment is now 34 weeks. Nearly 6.8 million workers have been jobless for six months or more, and they represent 46 percent of all unemployed workers.

The Senate’s substitute for the House bill does include the $24 billion in additional FMAP aid to states to help support their Medicaid programs, another provision like COBRA that had been stripped out of the House version.

The extension of federal benefits through the end of November is an essential bare minimum to help the long-term unemployed and their local communities. Christine Owens, executive director of the National Employment Law Project said today that, according to the Congressional Budget Office, unemployment insurance is the most effective form of economic stimulus, creating $1.93 in GDP for every $1 in benefits. “Our real deficit is a jobs deficit,” she said on a conference call with reporters. “It is urgent that Congress act to restore the extended unemployment and COBRA programs as quickly as possible.”

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