Expiring subsidies put COBRA out of reach

Teresa Beazley had paid $189 a month for government-sponsored health insurance since she was laid off last year from her job in the accounting center of a major grocery store chain.
Last month, though, the Hendersonville woman got a jolt when her bill more than doubled to $453 a month.

"I was sort of in a bind," the 59-year-old Beazley said. "I have to have health insurance, so I went ahead and paid it." She's not sure she can afford to pay the higher bill again.

Like thousands of others still out of work and with no job prospects in sight, Beazley finds herself caught in a gap created when a subsidy to help cover COBRA health insurance premiums for the country's unemployed ran out this summer.

RelatedChart: Unemployment in Middle Tennessee

People who started on COBRA before May 31 can get the federal 65 percent subsidy for 15 months. Those who have exhausted the subsidy or have been laid off since the end of May are out of luck, and must pay the full freight on their own for the year and a half that people between jobs are eligible for COBRA.

Beazley is angry that the subsidy has run out for many while unemployment rates remain stubbornly elevated in much of the state and nation.

"There's no nice way to put it, especially at my age," she said. "I did not ask to be laid off."

In Tennessee, the statewide unemployment rate was 9.8 percent in July — still high but the first time it has fallen below double digits since February 2009. The 13-county Nashville area registered a jobless rate of 8.8 percent for the month; while Davidson County alone had a 9.3 percent rate, according to labor data released Thursday.

COBRA — the Consolidated Omnibus Budget Reconciliation Act of 1985 —allows people who have lost their jobs to stay on their former employer's health plan if they pay the entire premium, plus a 2 percent administrative fee, usually for 18 months.

Although costly, it's typically less expensive than private insurance available to individuals and their families who aren't on employer-sponsored plans.

Last year, Congress approved the COBRA subsidy, which was funded by the federal stimulus. Advocates for workers had hoped Congress would expand the subsidy when it extended jobless benefits this summer — but that didn't happen.

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