[Congressional Record (Bound Edition), Volume 147 (2001), Part 7]
[Extensions of Remarks]
[Page 9507]
[From the U.S. Government Publishing Office, www.gpo.gov]



   STARK/MOAKLEY COBRA COVERAGE EXTENSION & AFFORDABILITY ACT OF 2001

                                 ______
                                 

                        HON. JOHN JOSEPH MOAKLEY

                            of massachusetts

                    in the house of representatives

                         Thursday, May 24, 2001

  Mr. MOAKLEY. Mr. Speaker, I am very pleased to join with my colleague 
and good friend Pete Stark (D-CA) today in introducing our legislation 
the ``COBRA Coverage Extension and Affordability Act of 2001.'' This 
legislation combines and expands earlier individual legislation that 
each of us introduced to help extend and improve this provision from 
the 1986 COBRA bill.
  The original COBRA law allows employees who face a covered change in 
their work status and would otherwise lose their health insurance to 
continue that same coverage for a period of up to 36 months depending 
on the situation. Under that law, covered employees would pay up to 102 
percent of the cost of their current health insurance plan--the 
employee and employer costs plus an additional fee to cover 
administrative expenses. Although the law says the coverage can last up 
to 36 months in some cases, most coverage is limited to 18 months.
  Our bill would change the law in three ways. First, it would allow 
anyone covered by the COBRA statute to maintain that coverage for up to 
five years under the existing rules. He or she would still be 
responsible for the entire cost of the insurance policy plus the 2 
percent administrative fee but would not have to face loss of insurance 
coverage or reduction in benefits while looking for a job with 
comparable health insurance. Next, it would expand the program to 
individuals who are over the age of 55 and qualified for COBRA coverage 
to extend their coverage until they become eligible for Medicare. If 
they go beyond five years, the cost of the premium would go to 125 
percent of the policy to help cover increased health care costs that 
may occur. Lastly, and perhaps most importantly, the bill provides a 50 
percent refundable tax credit of the premium to help offset the cost of 
this coverage to the individual. This provision will make such coverage 
far more affordable to those for whom the cost is an economic burden.
  In today's changing and challenging job market layoffs and reductions 
in staffing are becoming increasingly common and employees are forced 
to change jobs more often. Additionally, many businesses either do not 
offer health insurance at all, offer coverage that is not as 
comprehensive as the employee's previous plan, or do not make coverage 
available until the employee has been on the job for a specified period 
of time. Furthermore, many job hunters change jobs frequently or take 
short-term or temporary employment simply to pay the bills while 
searching for a job that is more suitable to his or her field of 
expertise. Eighteen months often is not long enough for many 
individuals to find employment that offers comparable coverage.
  However, the cost under this bill, though generally far less that 
acquiring private health insurance on the open market, can still be a 
substantial expense or even a roadblock to the employee. The bill's 50 
percent tax credit for premium costs would greatly reduce that 
financial burden. And, most importantly, the individual would be able 
to continue the same policy with the same coverage. This becomes 
particularly important if that person or his or her family has a pre-
existing condition that needs specific care or anticipates an upcoming 
medical need such as surgery or pregnancy. Continuity of care can be 
extremely important and in some cases even life-saving. While the 
recently enacted Health Insurance Portability Act allows individuals 
losing their coverage to obtain health insurance without bias with 
regard to a pre-existing condition, it does not guarantee the same plan 
coverage and it does not guarantee coverage at a comparable cost. Our 
bill does.
  This bill is not the only solution to our nation's growing number of 
uninsured Americans. But it will help protect many of our nation's 
workers who face losing health insurance coverage due to job loss. It 
is not always possible to know if or when we will need health care 
either for ourselves or our families. But when we are faced with a 
debilitating illness, a serious accident, or even a joyous event like 
an upcoming birth, our main concern shouldn't be the cost and whether 
or not our insurance will be adequate. Please join with Rep. Stark and 
me in supporting this legislation.

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