The COBRA Continuation Coverage Assistance, which was made available under ARRA (stimulus) is ending for millions who started on the plan in March. This subsidy paid 65% of the cost of COBRA for a nine month period: The premium reduction applies to periods of health coverage beginning on or after February 17, 2009 and lasts for up to nine months for those eligible for COBRA during the period beginning September 1, 2008 and ending December 31, 2009 due to an involuntary termination of employment that occurred during that period.

I’ll just put the main points in the list below:

  • If you applied for the subsidy on or before March 1, 2009, you lost that subsidy on December 1, 2009.
  • If you applied for the subsidy after March 1, 2009, you are still eligible for nine months worth of subsidy.
  • If you are laid off AFTER December 31, 2009, you will not be eligible for a subsidy unless Congress agrees to extend the subsidy.

According to Loss of COBRA aid puts people in health care bind: The coverage is so expensive, often exceeding a person’s monthly unemployment checks in some states, that only one in five unemployed American workers purchase COBRA, FamiliesUSA said in a report earlier this year.

There’s another catch: If a person drops COBRA now, he or she would not be able to return to the program if Congress approves legislation to extend the subsidies.

Millions of Jobless Lose Insurance Aid: Ron Pollack, executive director of Families USA, predicted that most people who lost their subsidies on Monday would not be able to pay the full cost of their premiums and would drop their coverage altogether.

He said that the broader health care legislation in Congress would help by establishing new insurance marketplaces with tax credits — but they would not be set up for several years, leaving millions of people stranded in the interim.

Some Democrats have introduced legislation outside of the health care bills to extend the Cobra subsidies a few months and even increase them. The subject may come up as part of a new jobs bill in the near future, but nothing has been approved so far.

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