Cobra Health Insurance

The Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA, allows unemployed workers to keep their health insurance from their previous employer for up to 18 months.

Up until the 15-month subsidy was approved last year as part of the federal economic stimulus bill, laid-off workers were required to pick up the full premium. With the subsidy, the unemployed paid 35 percent of the cost.

That subsidy is now at risk while the U.S. Senate considers whether to extend it. It was eliminated from one jobs bill but is included in a second jobs bill. The Senate, however, has not decided which bill it plans to hear, said Cheryl Fish-Parcham, director of health-care policy for Families USA.

If the subsidy is allowed to expire, no one laid off after Feb. 28 will be eligible for the reduced premiums.

That could mean many won't be able to afford the premiums and would join the growing rolls of the uninsured, according to Families USA, a national organization for health care consumers.

Throwing a lifeline

The federal subsidy "gives people a small margin of hope," said Terra Eyl, a career transition specialist with the Larimer County Workforce Center in Fort Collins.

Without the subsidy, COBRA premiums can cost upwards of $1,000 a month making it unaffordable for most families trying to live on unemployment benefits.
Even with the subsidy, COBRA payments can be unaffordable for people, particularly those with lower incomes, Eyl said. "But a small margin of hope is better than no margin, in my opinion."

Families USA estimates an additional 57,500 Coloradans became uninsured last year when they lost their jobs. And, although economic recovery appears to be under way, economists agree job growth is still a long way off, meaning the unemployment rate is likely to rise this year.

One quarter of Larimer County residents between 18 and 65 were uninsured at some point from 2005 through the end of 2007, according to Health District of Northern Larimer County, the latest statistics available.