COBRA subsidies die with a whimper

The one thing that made COBRA not suck is gone

WASHINGTON, DC - MARCH 19: Speaker of the House Nancy Pelosi (D-CA) holds a news conference in the U.S. Capitol Visitors Center on March 19, 2021 in Washington, DC. Pelosi answered reporters' questions and spoke about the American Rescue Plan Act's enhancements to the Affordable Care Act. (Photo by Chip Somodevilla/Getty Images)

Putting on my Politico Playbook hat for just one second—before it curses me horribly, like the hat made from a witch’s arsehole in What We Do In The Shadows—there is only one story dominating Washington right now. It is the frantic hostage negotiations over the reconciliation bill, in which a Yacht Bastard and a Wine Mom Bastard are holding up the possibility of Democrats having anything worth running on in 2022, for inscrutable and infuriating reasons. The rush to pass the bill and the furious, late-night talks over it are both actually important and the sort of thing that gets political reporters very excited, which are two circles of a Venn Diagram that don’t always overlap.

Perhaps this is why another issue that affects millions of people has gone almost totally unmentioned: The subsidies for COBRA, the program that allows you to keep your health insurance when you lose your job, expired yesterday. That means everyone who lost their job since March, who might have been relying on this temporarily free insurance, now faces a bill of hundreds of dollars each month to keep their plan. (If you like your plan, etc.) No one is talking about this; there are no stories from major national news that I can find, and barely even any from healthcare news outlets. I see one story in Healthcare Dive; all the other results are from websites offering legal advice to employers, reminding them that they have to notify employees their premium support is expiring, with annoying pun-adjacent headlines.

The American Rescue Plan Act, passed in March, fully subsidized COBRA premiums for employees who lost their job—but only until the end of the fiscal year, which was yesterday, September 30. According to data kept by the Bureau of Labor Statistics, an average of 1.4 million per month people lost their jobs between March and July. (Thanks to this week’s Sick Note Hero Matt Bruenig for sharing this source with me.) That’s just over 7 million people who were laid off or fired in those months; including people who quit, it’s almost 20 million. Not all these people will have been relying on COBRA, but many will. Covered California estimates 138,000 people will be eligible for their special enrollment period, just in California.

Usually, COBRA is terrible-to-useless; it’s mostly just an insulting letter you get when you lose your job. The premiums are insanely high, hundreds or thousands of dollars, because you now have to pay the part your employer had been paying, plus up to two percent of the plan’s premium to cover your ex-employer’s administrative costs. Also, you just lost your job, so exactly what money are you supposed to use to pay these premiums? But with the subsidy, the choice became a no-brainer. Do you want to keep your insurance plan, with all you might have paid into your deductible and the network of doctors that you’ve had to fit your care into, for free? Of course you do. It’s free!

At the time, many on the left (including myself) were critical of the choice to subsidize private insurance instead of taking this opportunity to use any sort of public alternative, like Medicaid or even the public option that Biden ran on. But this argument was always over the best way to ensure people had insurance, not that people who lost their jobs should be without insurance. Now that these subsidies are expiring, just six months later, we have the worst of all worlds: Democrats missed an opportunity to make the case for government-sponsored health insurance, and a bunch of people are now uninsured. Also, there is still a pandemic, and thousands of people are dying each week. Fewer people were dying each day when the subsidies bill passed than they are now.

I talked to some people who had been relying on subsidized COBRA for their insurance until yesterday. Some are choosing to pay up for the now-high premium; others are looking for ACA plans. They told me that the loss meant losing doctors, forgoing care, and saying goodbye to the money they’d already spent to meet their deductibles. (Remember how ‘keeping your plan’ was the reason we couldn’t have single-payer?) Worst of all was the sense of uncertainty these people had. They don’t know whether things will change for them, or what their employment status and insurance situation will look like a few months from now. Then again, you never really know that with the employer-sponsored insurance system. Subsidized COBRA was always a temporary patch over this broken system, which cannot be fixed or made just. But six months isn’t just temporary; it’s insulting.

These conversations have been edited and condensed.

Laura, in Georgia

Laura: I lost my job March 1st of this year. I have bipolar disorder, so I have to have monthly appointments for that, that's not negotiable. That will derail my life completely if I don't get my monthly visit with my psychiatrist. I've had insurance for the last five or six years, so I'm very stable. I have all my doctors, I really don't want to change them. So it was a massive blessing when, I think the bill was passed on March 14th. I was watching it really carefully, having recently become unemployed and was so excited that the COBRA subsidy was there and I took full advantage of it, but it was never publicized. I never could understand why no one was talking about it, because it was such huge relief. I really just haven't even seen people talking about it.

Sick Note: What's your plan now for when it expires?

Laura: Well, I had an appointment with an orthopedic doctor on the 22nd of [September]. I had some hip pain all summer long—it wasn't horrible, wasn't going away. And when I talked to him, he was like, "Oh boy, this kind of seems like a hip impingement." So that's something that doesn't heal on its own. That's not something you can let go. It's either surgery if it's bad enough, or some steroid shots or something. So no matter what, I'm going to have an MRI. Earliest they could do it was October 22nd, so I'm sitting here and I'm weighing. Everyone always complains or says, if we socialize medicine we're going to have to wait forever. And I'm like, I've waited months, so many times in my life. I've waited nine months before for a doctor's appointment.

So I did the math and it's like, well, no matter what, buying insurance for another month is going to be cheaper than paying for an MRI out of pocket. I'm really fortunate, I live with my boyfriend of seven years and I have a lot of really good family support. Between my parents, him, and me, we’re going to split almost a thousand dollars a month three ways, to just get through this. I'm an only child, so my parents by no means are wealthy, but they're able to help me every once in a while. But I know that I would be completely screwed if I didn't have any form of support system to lean on. I'm very fortunate, but at the same time, this is to keep this insurance until I figure out if I need surgery or not.

Sick Note: So your choices are basically sign for COBRA and pay the premium, or get an ACA plan, which would probably be cheaper, but would not be guaranteed to have all the doctors and so on in network. Is that kind of the thing you're facing?

Laura: Yep. That's right on the money. And I've got pretty bad anxiety in general, you know, struggle with mental health stuff, but I've got it under control when everything's... I've worked so hard to get all these doctors that I trust. And all these, even my primary care person. Even looking into ACA plans feels so overwhelming because I'll have to call everyone. Oh gosh, I sound so stupid saying it like that, but it seems so simple. Just call your doctor's office and see if they accept this, but it can just feel so overwhelming with everything else. I'm still fighting for back benefits from unemployment. There's just so much more to losing your job and keeping afloat than I had imagined. ACA is definitely an option. It just feels so overwhelming. And then my third option's just self pay, which nobody wants to do that.

[…]

The dream would be that any politician would talk about it. Nobody's even saying anything. Like, I feel crazy. Everything's running out and there's no news articles about it. I'm on Twitter constantly, so I feel like I would see if anyone was talking about this at all. And I feel like the politicians aren't talking about it.

Definitely being in Georgia, it's just the most frustrating thing for me is, I'm like, "Will one of my elected politicians just talk about this.?" Like when they cut off the unemployment benefits, I hadn't even been approved yet. We went through hell down here for Jon Ossoff and Reverend Warnock and it's like, okay, we all did it, we all voted for you. And then when the governor declined the federal $300 a week or whatever it was, they didn't even tweet about it. They didn't even talk about it. And I was like, "Man, I just got on unemployment, this is crap." I just want y'all to even show that you're paying attention to what's happening to... Just give me some lip service or something. I know you don't really care, but this is a real issue for a lot of people.

Sick Note: How long did it take you to get approved for unemployment?

Laura: Oh man, it's been a joke. And they still owe me a couple thousand dollars. They just didn't pay for most of it. So I applied on the seventh and the determination was made on 6/18. And I had to contact the Governor's Office of Constituent Services. It's just they don't want to do their jobs. It's very obvious. I've been employed in Georgia for five or six years, so I've paid into this, my employers have paid into it.

What's wild too is it took four months for, it's called Admin America is the company that manages my Cobra or whatever, it's a third party. It took almost three and a half, four months until everything was actually instated for Cobra. And I mean, I had to pay out of pocket for my dental appointments, my monthly [appointments], and then get reimbursed. The coverage is retroactive, from March 1st forward I was covered, but I had to pay out of pocket until I could do that. And I know a lot of people just were not in a situation to be able to do that. They either didn't have the credit card, couldn't borrow it, whatever.

Poppy, in California

[Poppy is a pseudonym.]

Poppy: I'm a writer, I work in the entertainment industry. Before the pandemic, I worked in a writers room and in the IATSE 871 Union, so I got my health insurance through them. When the pandemic hit, I was basically forced into freelance by my production. They gave me the choice between having a living wage or having my hours count towards my health care. I didn't really have a choice. The writers room wrapped up so I was just doing freelance podcast production, living off of the hours I had banked working on that show. In September of last year, I was two hours short of having my healthcare extended for another six months. Another hour show gave me two weeks, so they extended my health insurance by six months. That ended March 30th, and I was moved on to no-cost COBRA, which now ends September 30th.

I got a letter maybe a couple days ago, saying that my COBRA extension to pay for it myself would be a little under $800 a month, which is pretty insane.

[…]

I have been trying to navigate the marketplace, and I'm probably gonna do a Blue Shield PPO.

Sick Note: Do you know how much that's going to cost?

Poppy: Yeah, so the plan I want to get is also in the $700s a month. That one's a little bit less, like $715 versus like, $770. But that's for the Platinum plan. I can't really afford that, so I'm gonna do the silver plan, which is like $350 a month. All the while, by the way, I'm still paying my union dues. I'm still doing all of the things that are required to upkeep my union membership. I just don't have access to any of the benefits.

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Sick Note: Is that premium after the any subsidies that you would qualify for?

Poppy: I don't think I qualify for any subsidies because my freelance income is too high to qualify me for any actual aid, but it's too low to pay $800 a month for health insurance, which doesn't even cover anything. Even though I had this really good health insurance through my union, and pay whatever I need to, I still paid a ton for a hospital visit I had this summer and the subsequent procedures. Now I'm in this position where I already paid out my out of pocket maximum, because I was in the hospital and because I had all these complications from this procedure. But there's still three months of the year left in which I'm going to need follow-up appointments, and I can't get them, because now I have to start my entire deductible over again.

Sick Note: Would you mind telling me anything about about the health problems you mentioned?

Poppy: I had a LEEP procedure scheduled at the beginning of July, which is a procedure for women who have HPV to clear out the area. It's super common, it's usually very low risk. I had major complications and I was hemorrhaging, I went to the hospital, was there for hours, they did nothing, they misdiagnosed me. They kept saying, “are you sure it's not your period,” and I was like, I'm pretty sure I don't believe through an adult diaper in less than 20 minutes on my period.

Afterwards I had to go into her office the next day, because I was still hemorrhaging. She had to cauterize my cervix, without any numbing, and it was a little over 45 minutes of pure procedure without any anesthesia, which was horrifying. So that was a four day period of just in and out of doctors' offices, hospitals, etc.

Sick Note: Do you have any kind of ongoing health needs or medications or anything from that?

Poppy: From that I just need semi regular checkups with the OB just to make sure I'm normal, but I do separately have PTSD and see a mental health person. I do cognitive behavioral therapy and have for years, and I've been with the same person for a long time but I've obviously had to like reduce the amount of therapy; it would be better if I didn't have to reduce it, I should be in it more frequently, but I just can't afford it. So I've had to reduce it and I'm gonna have to reduce it even further.

Sick Note: Is that something that previously your insurance would have paid a bit towards?

Poppy: Yeah, reimbursed for half of it, which was great and very much needed. The way that therapy is set up especially in LA, it's really difficult to find someone that you have a relationship with, because my PTSD was caused by a singular traumatic incident. It was imminent, I really needed treatment immediately and I've been with her for so long. So changing [doctors] isn't even really an option.

Casey Johnston, in New York

(Casey is my friend, and the author of the excellent Substack She’s a Beast. It’s a must-read for anyone interested in lifting weights, ‘wellness,’ body image, or just being strong and cool. She was laid off by Vice last month.)

Check out She's A Beast

Casey Johnston: My plan is to just pay for it. I think equivalent insurance is even more expensive on the exchange. Insurance that isn't basically like indemnity insurance (silver plan) is around $650. My COBRA payment is $884, which sucks shit. But it covers dental/vision and my insurance covers like, fertility counseling/egg freezing. A few things like that.

I’m not any meds currently but want to keep the option open given the generally uncertain future, and my uncertain future in particular. I know some even just like, mental health-type meds can be $300 a month. But my biggest one is probably therapy. My therapist is in network, I’ve already hit my deductible for the year (which I think is $1500?). So insurance makes a big difference there too, I think the copay is $20.

I have not done aggressive math on if this is “worth it” but it's not going to make a crazy difference to stay on it for now while other things are crazy and revisit in a few months if I should switch.

Brenden Gallagher, in California

Brenden Gallagher: I got into [the] Writers Guild as a staff writer of television about a year and a half ago. You accrue a certain amount of points or amount of time that you're eligible, so the work I did kept me on for about a year and change. And then on top of that, Biden passed the extension, which gave us three more months. When that was up, my wife and I had to go back on the ACA Exchange, which I've been on and off of throughout my professional life.

Sick Note: So that covers both you and your wife?

Brenden Gallagher: That's right. My understanding is the subsidies in California are pretty good, compared to the rest of the country, which I feel grateful for. So $600 a month for the two of us is good enough for a gold plan, which is pretty nice. I mean, it's nothing compared to what I had with union insurance. Union insurance is, as they say, the Cadillac of insurances, and there's a conversation for another time about how much energy is put into bargaining that, as opposed to other bargaining points that could be maybe better for members, but I'm grateful to have had that great insurance. It taught me, in having that excellent insurance, the value of making sure you're getting co-pays instead of co-insurance, and checking your prescription drug deductibles and things like that. Because I think being in a union, in addition to having good insurance, there's good educational focus by the union on why your insurance is good.

Sick Note: When you switched insurance, did that cause any headaches with having to get different doctors?

Brenden Gallagher: Oh yeah. I mean, I won't be able to see my doctor again until I'm back on WGA, because the doctor is loaned out to the WGA or the motion picture industry, which is the umbrella for all the Hollywood workers. So I can stay in the UCLA health system, but I can't see him personally again until I get some sort of motion picture insurance back. Probably have to switch dentists, probably have to switch some of the aspects of, double checking all the various prescriptions our family has for things like, do we have to go generic and things like that. And I don't have the full report on that yet because my coverage will be effective the first of the month. So I'm still on the last vestiges of the insurance, but I'm already making notes in my calendar to double-check everything and make sure I'm not going to get some crazy charge because something's on autopay that I no longer qualify for.

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Sick Note: You said that eventually you think you'll be able to switch back to WGA insurance?

Brenden Gallagher: Yeah. I mean, our business is such that you go through periods of unemployment, and then you get back on, and as soon as you get the gig, you start accruing hours. My wife and I both work pretty frequently. I would attribute this moment to the pandemic, I think, among other factors, but the pandemic being foremost among them because TV was at a 90% standstill in June of 2020. So now there's a backlog of material, now that crews can make it again.

Sick Note: Just to be clear about how it works, when your show starts getting made again, you'll be able to accrue those hours?

Brenden Gallagher: In the old days, when things were 22 episodes on network TV, you'd be working way more than 20 weeks, so you'd be banking way more than 20 weeks’ worth of hours. So those hours, if you work three years in a row, you might be covered for the next 10 years based on the hours you've accrued—which is pretty generous, I have to admit. Again, I have no criticism in terms of what's possible in American life, I would wager that the WGA plan is among the best, and I feel very grateful for that. Especially as other unions have seen significant rollbacks, but obviously once you have that level care, you're like, well, why doesn't everyone in America get this?