The changes that the health care bills in Congress envision are years away — not soon enough to help the millions of unemployed people who, on Monday, lost their temporary federal subsidies for health insurance.
That means that people like Linda Rasor, 56, who lives in Haslett, near East Lansing, Mich., and who was laid off from her energy consulting job in February, will have to start paying triple the cost for their health insurance.
As losses rippled out from Michigan’s devastated auto industry, Ms. Rasor was laid off from Johnson Controls Inc. With the federal subsidy, she has been paying $407 a month to cover herself, her husband, who is an independent contractor, and her daughter, who is in college. But with the subsidy now gone, her premiums will jump to $1,100 a month.
The subsidies, which Congress approved earlier this year under the economic stimulus package, expired Monday for the first wave of recipients. The package provided $25 billion in temporary financial help for unemployed people who were still on their employers’ insurance plans under the decades-old Consolidated Omnibus Budget Reconciliation Act, popularly known as Cobra.
The subsidies were intended to allow an estimated seven million people who lost their jobs from September 2008 to December 2009 to help keep that insurance for up to nine months starting in March; normally they would have to pay the full premiums, but the subsidies covered 65 percent of that cost.
Ms. Rasor receives $1,400 in unemployment insurance, which means the new premiums will leave her with just $300 at the end of each month — cutting into her ability to help her husband pay the mortgage and her daughter’s tuition.
A new report by Families USA, a health advocacy group based in Washington, has found that the average Cobra premium varies widely from state to state — and in nine states is actually higher than the average unemployment insurance check.
Ron Pollack, executive director of Families USA, predicted that most people who lost their subsidies on Monday would not be able to pay the full cost of their premiums and would drop their coverage altogether.
He said that the broader health care legislation in Congress would help by establishing new insurance marketplaces with tax credits — but they would not be set up for several years, leaving millions of people stranded in the interim.
Some Democrats have introduced legislation outside of the health care bills to extend the Cobra subsidies a few months and even increase them. The subject may come up as part of a new jobs bill in the near future, but nothing has been approved so far.
Ms. Rasor has stitched together some consulting work, but it carries no health benefits and the local jobs landscape is bleak.
“I’m in Michigan,” she said. “Need I say more?” The state’s unemployment rate is 15 percent, the highest in the nation.
Ms. Rasor said she would pay the full Cobra premium for now because she could not find the same coverage for less, and she is afraid that she would be turned down by a new insurer because she just had a knee cap replacement, which would be considered a pre-existing condition.
But she will have to find an alternative sometime next year anyway, because eligibility for Cobra lasts only 18 months.
She has given herself until the end of December to find work, she said, then she and her husband will start looking out of state.
“I feel like I’m part of the Grapes of Wrath,” she said. “I’ve got to leave home to find a job.”