COBRA subsidy stall could raise premiums for millions while battle rages over 'doc fix'

The (Delaware County, Pa.) Daily Times reports that health care premiums for millions of Americans could "triple with the expiration of government subsidies to the COBRA program."

"Part of the 2009 stimulus bill, the assistance reduced the cost of health insurance by 65 percent for laid off workers for a period of 15 months. The subsidy [started expiring] June 1 and an extension was not included in a jobs bill passed by the House of Representatives last Friday." A Department of Treasury study said premiums could rise from an average of $389 to more than $1,100 per month without the subsidy. "'Even though our economy is growing again, with nearly 300,000 jobs created in April, many workers are still losing their jobs,' [Rep. Joe Sestak, D-Pa.] said. 'Those who find themselves out of work this month will face the prospect of searching for work in a tough economy, with unemployment lingering around 10 percent'" [he added] (Logue, 6/3).

The Hill: Sen. Chuck Grassley in the meantime is criticizing the Obama administration for "touting the COBRA subsidy as a special tax incentive for small businesses when it actually benefits former employees who no longer receive financial aid from employers for health coverage. … Grassley is the ranking member on the Senate Finance Committee and argues COBRA aids former employees by subsidizing their cost for health coverage and not the company that used to employ them" (Heflin, 6/2).

In a separate story, The Hill reports that the American Medical Association will launch a new multi-million dollar campaign advertising campaign Thursday to pressure senators to approve a freeze on scheduled Medicare payment cuts to doctors. "The print, radio and TV ads will encourage people to call their senators and urge them to prevent a 21.3 percent cut to payment rates that could force many doctors to stop accepting Medicare patients. ... The House passed a 19-month fix that would give physicians a 2.2 percent pay bump for the remainder of the year and an extra 1 percent bump next year. In 2012, physicians would face a 33 percent rate cut if Congress doesn't act again" (Pecquet, 6/3).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.