By now you would have to live under a rock not to have heard about the economic stimulus package that President Obama signed into law. The actual name of the law is the American Recovery and Reinvestment Act of 2009 and can be viewed in full here. I actually went and read the text of the law as it relates to COBRA because that part is going to have a very immediate impact on my family.
In a nutshell, the part of the package that pertains to COBRA says that if you are “involuntarily terminated” from your job between September 1, 2008 and December 31, 2009, you may be eligble to elect COBRA at 35% of the normal rate. The stimulus money will subsidize the other 65%. Some of the fine print includes that you can only elect it for 9 months at the reduced rate, you cannot take it if you are eligible for coverage with a new employer, and the subsidy phases out if you make more than $125,000 ($250,000 married).
Even if this didn’t impact me directly, I would be in favor of this part of the package. It makes affordable insurance for people who have been working and were laid off. It doesn’t allow people to take advantage of it if they get a new job with coverage. It phases out at a fair point where people should be able to pay for coverage themselves. And it sets definite time constraints so that it is only a temporary measure while people in the country are getting back on their feet. Hopefully it will keep more people from either not getting medical assistance when they need it or just getting treatment and then abandoning their financial responsibilities anyway.
Now the part about how it impacts me is more difficult. At first when I heard this, I was ecstatic. My husband just lost his job after 10 years because his company is closing. I’m self-employed, so he has always carried coverage for us and our two young daughters. One of our biggest worries when we found out about his job two weeks ago was about the health coverage. So this is perfect, right?
Then why do I feel a pang of guilt taking the subsidy? In some way, it feels like taking a government handout, which isn’t something that my husband and I ever want to do. On the other hand, we’ve both paid our taxes faithfully since we were 16. We’ve always worked full-time (sometimes two jobs each) and continue to pay our fair share of taxes. It’s only fair that we take the help at a time when we need it, right? Maybe it’s pride that gets in our way.
No matter what we personally decide to do, the COBRA provisions of the stimulus package are going to help a lot of people who are trying to help themselves.