[Congressional Record Volume 149, Number 112 (Friday, July 25, 2003)]
[Extensions of Remarks]
[Page E1594]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             INTRODUCTION OF THE COBRA COVERAGE ACT OF 2003

                                 ______
                                 

                          HON. ADAM B. SCHIFF

                             of california

                    in the house of representatives

                        Thursday, July 24, 2003

  Mr. SCHIFF. Mr. Speaker, today I am introducing the COBRA Coverage 
Act of 2003. As you may know, our Nation's faltering economy has 
resulted in staggering unemployment, unemployment that has risen from 
5.7 percent in January of this year to 6.4 percent in June, leaving 
millions of Americans out of work. The loss of one's job is often 
accompanied by the loss of employer-based health coverage and the 
ability to afford individual health insurance. In this time of economic 
hardship, we must act to make health care more accessible to the 
working and middle-class families of America.
  In an attempt to reduce the growing population of those without 
health coverage, Title X of the Consolidated Omnibus Budget 
Reconciliation Act of 1985 (COBRA) provided access to group health 
insurance for workers who had lost their employer-sponsored coverage. 
COBRA requires employers who offer health insurance to continue 
coverage for their employees under circumstances such as a change in 
their employment status. However, this law allows the employer to 
charge up to 102 percent of the premium for the covered beneficiary and 
up to 150 percent for disabled individuals who qualify for an 
additional 11 months of coverage.
  The Kaiser Family Foundation estimates that in 2002 health care 
premiums increased by 12.7 percent, making the average cost for self-
only coverage $3,060 while the average cost for the family coverage 
reached $7,954. These high costs make retaining health coverage 
extremely difficult for individuals without work, without an income. As 
a result many people and their families choose to go without health 
insurance until they find another job. This is unacceptable.
  Not only do these prohibitive costs prevent people from maintaining 
their health coverage, they can also drive up the group costs of 
employers who offer COBRA coverage. Because health care premiums are so 
high, those who have costly, preexisting health problems are more 
likely to enroll in extended coverage than those who are healthy. These 
costs are often passed onto the employer and onto the others covered by 
the group insurance.
  We can alleviate this problem by making COBRA health coverage more 
accessible and more affordable. With the COBRA Coverage Act of 2003, 
laid-off workers would be provided with a 50 percent tax credit toward 
the cost of COBRA coverage, up to a maximum of $110 for an individual 
and $290 for a family per month. This credit is entirely refundable, 
which means one can receive it regardless of one's tax liability, and 
it is advanceable, meaning that it's available to the recipient 
immediately. This is possible because the tax credit would be 
administered through the employer.
  While we work diligently to improve our economy, we must not sit idle 
and turn our backs on the millions of uninsured Americans. We must 
assist those who are suffering by ensuring they retain access to 
affordable health insurance for themselves and for their families.

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