The temporary health benefits continuation subsidy helped some involuntarily terminated workers but came nowhere close to providing “universal coverage.”
Researchers at the Urban Institute, Washington, give that assessment in a review of the 65% federal COBRA group health continuation premium subsidy that Congress included in the in the American Recovery and Reinvestment Act (ARRA) of 2009. The subsidy expired May 31.
Before the subsidy took effect, workers had to pay 102% of the full cost of employer-sponsored health coverage to continue benefits. Now that the subsidy has expired, workers must once again pay 102% of the cost, rather than 35%.
The Urban Institute researchers say estimates of the effects of the COBRA subsidy on COBRA take-up rates vary, with Ceridian Corp., Minneapolis – a firm that manages benefits programs for a wide range of employers – reporting that take-up rates at client employers had increased to about 18%, from about 12%.
“Most of the before-and-after take-up rates presented above likely underestimate ARRA’s effects on its target population of job losers because they do not compare the same types of people before and after ARRA.
Enrollment figures from one benefits firm suggest that workers who signed up for COBRA when the subsidy was available might have been somewhat healthier than the workers who sign up for unsubsidized COBRA coverage, the researchers say.
The researchers found that federal efforts to promote the program were effective and that implementation seemed to go reasonably well, under the circumstances.