Fewer unemployed Americans than expected were aided by the federal subsidy that helps pay for COBRA health care coverage, partly because COBRA premiums were still unaffordable, cites a new article by the nonpartisan Employee Benefit Research Institute.
The America Recovery and Reinvestment Act, a legislative attempt to lessen the impact of the recession, allowed the federal government to pay 65 percent of the premium for those covered by COBRA but lost their job between Sept. 1, 2008, and Dec. 31, 2009. Congress extended the subsidy, which was available for up to nine months, three times. The last extension was in April 2010.
In assessing the program's performance, there are contradictory estimates of how many benefited from the COBRA subsidy, EBRI notes, but typically, the subsidy take up has been less than anticipated. The U.S. Census Bureau's Survey of Income and Program Participation, a nationally representative survey, provided the data used by EBRI.
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"The COBRA subsidies that became available in April 2009 do appear to have had an impact on the percentage of nonworkers with coverage through a former employer," says Paul Fronstin, director of EBRI's Health Research and Education Program and author of the article. "But they appear to have assisted far fewer than the originally estimated 7 million individuals."
According to Fronstin, these findings could affect of the available subsidies in 2014 under provisions of the Patient Protection and Affordable Care Act, meaning the number of uninsured may not drop as much as expected.
The full article, which appears in the October issue of EBRI Notes, is available online at www.ebri.org.
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