Subsidies Could Defang Risk From New COBRA Guidance Chart: For Some Newly Unemployed, Health Coverage Options Are Pricey

The Trump administration recently released guidance that will allow the newly unemployed to retroactively opt into COBRA months from now, which could increase the risk of adverse selection and thus harm fully insured and self-funded employer plans’ risk pools. With millions of Americans suddenly unemployed, and employers reeling from sudden drops in revenue, a coalition of large companies is lobbying for the federal government to subsidize employer plans’ COBRA benefits.

Meanwhile, a proposal passed by the House would have the federal government pay full COBRA premiums for approximately nine months, making the program free to anyone eligible for it. That plan, included in the Heroes Act (H.R. 6800), could be a boon to employers and insurance carriers, but it faces challenges in the Senate and could harm individual insurance markets.

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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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