Report: Fewer People Than Expected Chose COBRA Subsidy

Fewer people than expected chose to use the COBRA subsidy offered by the federal government, according to an analysis by the Employee Benefit Research Institute, The New York Times Prescriptions blog reports.

The report notes that few people purchased COBRA coverage after losing their jobs, even with the 65 percent subsidy, in part because “‘even after the subsidy, COBRA premiums may not be affordable for many families, especially at a time when they have seen a decline in income and since health insurance is expensive even with the subsidy.’ … Family coverage cost, on average, more than $13,000 a year, so that after the subsidy families would still have to pay nearly $5,000 for coverage.” The new federal health law “also relies on subsidies to help people who could otherwise not afford coverage purchase insurance. Fewer people may end up with health insurance because they still cannot afford coverage, even with the subsidies, said Paul Fronstin, the director of the institute’s health research and education program who wrote the article” (Abelson, 10/14).

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