April 20, 2020

Cortez Masto, Rosen Call for Health Insurance Subsidies for Furloughed and Laid-Off Workers

Las Vegas, Nev. – U.S. Senators Catherine Cortez Masto (D-Nev.) and Jacky Rosen (D-Nev.) joined a letter led by U.S. Senator Dick Durbin (D-Ill.) calling on Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Chuck Schumer (D-N.Y.) to include COBRA subsidies in any future coronavirus legislation. As Nevadans lose their jobs, many will also lose the health insurance coverage associated with their employment. A COBRA subsidy would enable them to maintain their negotiated employer-sponsored coverage.

“One option for Americans who lose their jobs or drop below the hours necessary to be eligible for employer-sponsored health coverage is COBRA,” wrote the senators. “COBRA allows people to keep their employer coverage for up to 18 months. However, people have to pay the full insurance premium—an average of $1,700 a month for a family plan—which is often unaffordable for those newly unemployed. Congress must step in and assist these individuals and families.”

Full text of the letter can be found here and below.

Dear Leaders McConnell and Schumer:

Thank you for your efforts to date to ensure swift passage of multiple bipartisan pieces of legislation vital to helping our nation’s families, health care providers, and small businesses cope with the ongoing COVID-19 pandemic. Looking forward, we recognize that additional legislation will be necessary to improve the public health and America’s ailing economy. To that end, we strongly urge you to ensure that any forthcoming COVID-19 package include robust federal subsidies so that individuals can maintain on their employer-sponsored health coverage when they lose their jobs.

Over the last three weeks, approximately seventeen million people have filed unemployment claims in their state. However, this unprecedented number of filings only reflects claims filed through April 4. Many more Americans are likely out of work, or soon will be, because of the COVID-19 pandemic. Forecasters predict that as many as 20 million people could lose their jobs by the end of April. Compounding this problem is the fact that unemployment for these individuals and their families will also mean they will lose their existing employer-sponsored health insurance.

In the U.S., over half of Americans receive their health coverage through their employer. Of the seventeen million Americans who have recently lost their jobs due to COVID-19, it is estimated that more than six million of these individuals have also lost their employer-sponsored health care. Depending on the extent of unemployment, between 23 to 35 million workers could lose their coverage. 

One option for Americans who lose their jobs or drop below the hours necessary to be eligible for employer-sponsored health coverage is COBRA. COBRA allows people to keep their employer coverage for up to 18 months. However, people have to pay the full insurance premium—an average of $1,700 a month for a family plan—which is often unaffordable for those newly unemployed. Congress must step in and assist these individuals and families. 

Following the 2008 financial crisis, the American Recovery and Reinvestment Act of 2009 (ARRA) was signed into law, which made COBRA continuation coverage more affordable and accessible to those who unexpectedly became unemployed. The law offered a 65 percent COBRA premium subsidy to individuals from September 1, 2008 to May 31, 2010. While well-intentioned and helpful to some, many individuals were unable to participate in the program because the remaining 35 percent insurance costs were still too expensive for them to cover.

We have heard from our constituents, as we know you have too. They are in dire economic circumstances. Despite government relief—in the form of extending monthly bill deadlines and increasing unemployment insurance—it will not be enough for most Americans to continue affording the type of health coverage they and their families have come to expect through their employer’s plan. In order to provide them adequate relief and to improve upon ARRA’s COBRA provision, we believe Congress must craft a bill that provides a robust federal COBRA premium subsidy for individuals who lose their employer-sponsored coverage as a result of the COVID-19 pandemic.

We stand ready and eager to work with you to ensure that the next COVID-19 relief package includes this important policy, which will ensure that millions of people losing their jobs as a result of this pandemic will not also suddenly become uninsured and at risk for catastrophic health care costs.

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