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May 17, 2008 10:49 PM | Alaskan Photo Tours

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Premiums rise as subsidy COBRA Ends

A new study estimates that the end of a strong government subsidy could force millions of workers dismissed to pay more than 80 percent of their monthly unemployment checks to maintain their health and family labor insurance coverage intact. It is estimated that 7 million people unemployed and their dependents are believed to have received the temporary subsidy, which pays 65 percent of their health insurance premiums under a law known as COBRA, the Omnibus Consolidated Omnibus Budget Reconciliation Act.

However, the grant of nine months due Monday for those who first began receiving in March through Recovery and Reinvestment Act.

Estimates vary, but COBRA subsidies pay an average of $ 722 per month for the national average cost family coverage, which runs $ 1,111 per month, according to Families USA, a liberal consumer health advocacy group.

Without the subsidy, without However, COBRA coverage family ate up a whopping 83.4 percent of the $ 1,333 average monthly benefit national unemployment insurance, report finds Families USA on Tuesday.

In nine states, the total family COBRA premiums exceed the average monthly state unemployment benefits, according to the study.

The situation is worse in Mississippi, where the average unsubsidized COBRA premium of $ 1,027 for family coverage is 22.4 percent higher than the average monthly unemployment benefit of $ 839, which is the lowest in the nation.

The other states where the average COBRA premiums for family principle the average monthly unemployment benefit are Alabama, Alaska, Arizona, Delaware, Florida, Louisiana, South Carolina and Tennessee.

Congressional Democrats are pushing to include some kind of extension of the subsidy in a bill COBRA important work is being designed. Rep. Joe Sestak, D-Pa., And Sen. Sherrod Brown, D-Ohio, have introduced separate legislation to extend the subsidies in the House of Representatives and the Senate, but is not clear how soon any new funding can be secured.

Meanwhile, many unemployed Americans may be left with the difficult decision to pay higher rates in a time of economic struggle very rushed, going without coverage or looking for cheaper coverage through government programs or the private market.

"For millions of displaced workers and their families, federal subsidies have been a lifesaver COBRA health coverage. It is essential therefore that the legislation new jobs extends subsidies, "said Ron Pollack, executive director of Families USA.

Generally, COBRA allows certain workers lose their jobs – unless they were dismissed for serious misconduct – to continue their health insurance with their former employers for up to 18 months. Before the grant is offered, only 9 percent of those eligible were seized because it was too expensive.

A study by Hewitt Associates found that the number of those who took advantage of the least expensive COBRA insurance has doubled since the grant was made available in March.

In Milford, Ohio, Tim Wolffrum monthly premium for COBRA coverage individual from $ 146 to $ 417 per month when its subsidy expires Dec. 31. That is in line with the estimate of U.S. families COBRA premiums that average of $ 396 for individuals, while the average subsidized premium is $ 139.

Wolffrum, 58, said he would like to see enlarged the grant, but the strong Republican opposition to the revision of health care and public spending in general, is unlikely.

Wolffrum said he understood the reluctance to spend, but was frustrated, however.

"I see all the aid we send to other countries around the world, and do not take care of our own right here, "he said.

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