COBRA Subsidy Ends: Did It Make a Difference?
From Sarah Kliff, writing at Ezra Klein’s blog:
With little notice or fanfare, today marks the end of federal subsidies for COBRA health insurance, the program that allows recently laid off workers to stay on their former employers’ health insurance. Traditionally, workers pay the entire premium, but as part of the stimulus package, Congress created a 65 percent COBRA subsidy, which was then extended repeatedly to stretch through the end of this month. That brings down the average family’s monthly premium from $1,137 to $398, according to the Kaiser Family Foundation.
So, did the subsidy work?
The results from four studies range from it worked a lot to it worked a decent amount to it worked a little to it didn’t work.
John, you are leaving us with too much suspense here.
Whether or not it worked depends upon your definition of success. If the goal was to bankrupt taxpayers then it probably worked.
Can’t we have something more definitve than this?
Sixty-five percent was way too high, and the rules were way too arbitrary (not everyone on COBRA qualified). A tax credit in the range of 20 to 25 percent would have made sense– at least so long as the employer exclusion exists. It is, after all, the same insurance policy (pre- and post- termination).