Like millions of Americans, Claire Gibbons was laid off this year and faced questions about major financial decisions, including her health insurance.
The 35-year-old Charleston resident, who lost her job at a prominent public relations firm in April, is a healthy nonsmoker with no pre-existing medical conditions. Yet the most affordable private insurance policy she could find cost $325 a month, she said, and that was for a bare minimum policy.
Fortunately for Gibbons, she was eligible for a nine-month subsidy - approved in February as part of the federal stimulus bill - that covers 65 percent of the cost of COBRA insurance.
But that help ran out Monday.
Consolidated Omnibus Budget Reconciliation Act insurance allows former employees to continue with their company's group health policies for at least 18 months, though they have to pay 100 percent of the premium plus a 2 percent administrative fee. That expense can make it cost-prohibitive.
But the subsidy cut Gibbons' monthly COBRA bill from $342 to $117 for a full policy covering health, vision and dental, which was critical as she launched her own public relations business, Powerspeak Communications.
"This subsidy makes a huge difference for those of us who are having to start over again," she said. "When you do, you look everywhere to cut expenses, and health insurance can turn out to be your No. 1 expense."
On Tuesday, the Washington- based health care advocacy group Families USA released a report on how the subsidies helped Americans and called for Congress to extend the benefits until health reforms can be implemented.
"When workers lose their jobs, they often lose their health coverage, as well," said Ron Pollack, executive director of Families USA. "For millions of laid-off workers and their families, the federal COBRA subsidies have been a health-coverage lifeline. It is essential, therefore, that new jobs legislation extends those subsidies."
The report, titled "Expiration of COBRA Subsidy," showed that the average monthly cost of COBRA, without subsidies, would eat up 83.4 percent of the average monthly unemployment benefit in the United States.
The report also notes that in nine states, including South Carolina, the average monthly COBRA cost without the subsidy exceeds unemployment benefits. In the Palmetto State, the average unemployment benefit is $1,061. COBRA without the subsidy is $1,090. With the subsidy, the cost for COBRA drops to $381.50.
Bills to extend the COBRA subsidy for six months are pending in Congress.
In a conference call coinciding with the release of the Expiration study, Pollack said he hoped it would pass before the holiday break because those who let their COBRA expire cannot rejoin the plan and those who lose their jobs after Dec. 31 will face no help from the subsidy.
"Undoubtedly, you will see a real spike in the number of people who are uninsured," said Pollack, noting that many will defer care and end up getting treated in an emergency room. "The real impact will be in lost lives."
Even if improved health reforms passed, he added that a stopgap measure is needed because it will take several years for them to be implemented.