For the average worker who has lost her job since May 31, the cost of COBRA has tripled. (Flickr, Steve Rhodes)

In the first week of July, Andie Davis’ husband, who worked in manufacturing, lost his job, as hundreds of thousands of Michiganders have since the onset of the recession. Soon after, he started collecting unemployment insurance benefits that might last the family of four as long as 99 weeks. Davis hopes that the benefits will keep the family afloat — the mortgage paid, school lunches made, the electricity on — without forcing her to tap into the family’s savings.

[Economy1] But to keep the family financially stable while both she and her husband look for work, she has decided to forgo health insurance. The Davis family looked at how much COBRA would cost them, thinking the government would help pay for it. Had her husband lost his job just six weeks earlier, Washington would have footed about two-thirds of the premium bill. But since Davis’ husband lost his job after May 31, the young couple is on their own.

The change has gone little-noticed, both by the press and by the laid-off persons impacted by it. But a popular stimulus provision, the federal subsidy of COBRA benefits, expired for newly unemployed workers as of the first day of June. That means, for the average worker who has lost her job since May 31, the cost of COBRA has tripled.

COBRA — a provision created in the Consolidated Omnibus Budget Reconciliation Act of 1985 — gives workers the option of buying into their old health-care plan when they lose their job. Before the recession, COBRA let workers who lost their job through no fault of their own pay the entire health-care premium plus a two-percent administrative fee to keep coverage, about $8,800 per year for the average enrollee. (Generally, COBRA lasted 18 months.)  As part of the American Recovery and Reinvestment Act, or the 2009 stimulus, Congress subsidized this coverage, given the massive number and economic hardship of laid-off workers. The subsidy paid for 65 percent of health-care premiums for up to 15 months, meaning an average enrollee paid less than $3,000 a year.

For the Davises, under COBRA, coverage might have been a manageable $400 a month. When Davis looked into enrolling her husband and herself, she found it would cost more than $1,100 a month — leaving the family just a few hundred dollars for the mortgage, utilities, gas and food. She sought information on other private plans, but considered all of them too expensive. For now, the Davises are purchasing barebones coverage that will help pay hospital bills in case they are in an accident.

She rationalizes: “Me and the husband, we’re young enough that we can go without visits to the dentist and the [gynecologist] for a year,” and she argues, “I just do not see how it would be worth paying that much money for coverage, when we’re looking at a lot of other problems.” She argues that if the choice is between routine care and paying the electric bill, she will choose the latter. In the meantime, she is praying that her husband’s asthma does not flare up in the fall and hoping that they find jobs soon.

The Davises are one of hundreds of thousands of families doing the same. According to a study of 200 very large employers by Hewitt Associates, the COBRA provision doubled the proportion of laid-off workers enrolling in the program. In the fall of 2008, before the subsidy, about 19 percent of laid-off employees enrolled in COBRA. During the first six months of the subsidy, 38 percent of laid-off workers chose to. Now, with the subsidy’s end, enrollment rates are plummeting.

“Enrollment rates will likely decline over time as workers can’t, or aren’t willing to, afford the high premiums associated with COBRA coverage,” Hewitt’s Karen Frost said in a statement. “It’s possible these laid off workers are simply seeking coverage with a new employer or through their spouse’s employer. Unfortunately, it’s also likely that some are just foregoing health insurance altogether.” The National Employment Law Project estimates that 144,000 individuals and families per month have lost out on the subsidy.

It wasn’t supposed to be this way, but the extension of the COBRA subsidy became caught up in the tax extenders bill — also known as the jobs bill or H.R. 4213 — a large package of popular stimulus provisions that eventually died at the hands of a Republican filibuster. Senate Democrats managed to move unemployment insurance benefits, but few other portions of the popular bill made it through a Senate allergic to deficit spending.

The COBRA subsidy is highly popular: Hart Research found that 70 percent of Americans support extending it.  And many on the Hill fought to keep it in the tax extenders bill or to push it through other provisions. “Millions of Americans have been hard hit by the recession and lost their jobs through no fault of their own,” Sen. Robert Casey (D-Pa.) argued. “If Congress turns its back on them, they will have an even more difficult time making ends meet. With no premium assistance, COBRA health care benefits would consume 75 percent of the monthly unemployment payment for a Pennsylvania family.”

He offered an amendment to keep the subsidy within the jobs packages, and along with Sen. Sherrod Brown (D-Ohio) has offered it as a standalone bill. The Extend COBRA Premium Assistance Program Act of 2010 provides a six-month subsidy for workers laid off between May 31 and Nov. 30. The provision is entirely deficit-neutral, eliminating a tax break on annuity trusts as a pay-for. (The bill is one of many that would extend COBRA. On the House side, Rep. Susan Davis (D-Calif.), for instance, introduced a bill doing so until relevant portions of Obama’s health care bill come into effect in 2014.)

Casey and Brown’s bill is popular — cosigned by Democratic Senators John Kerry (Mass.), Carl Levin (Mich.),  Sheldon Whitehouse (R.I.), Debbie Stabenow (Mich.), Patrick Leahy (Vt.), Christopher Dodd (Ct.), Al Franken (Minn.), Roland Burris (Il.) and Daniel Akaka (Hi.) and supported by a slew of others. But it is caught in committee, and its likelihood of passage any time soon is small.

That means that the popular provision is likely dead, and for families like the Davises, health care coverage will remain an unaffordable luxury.

But the subsidy not only helps individuals and families on unemployment benefits; it is also widely popular. Families USA has found that absent the subsidy, health insurance would become impossible to afford for hundreds of thousands. And a poll by Hart Research shows that 70 percent of Americans support extending the subsidies. Senate Majority Leader Harry Reid (D-Nev.) has signaled that the final Senate bill will include Casey’s COBRA provision.

“Millions of Americans have been hard hit by the recession and lost their jobs through no fault of their own,” Casey said in a statement. “If Congress turns its back on them, they will have an even more difficult time making ends meet. With no premium assistance, COBRA health care benefits would consume 75 percent of the monthly unemployment payment for a Pennsylvania family.”

Not only have House Democrats — who’d hoped to have their bill wrapped up and delivered to the Senate by Wednesday — failed to rally the support of the budget hawks in their own party, but whatever the House does send over to the upper chamber, “Senate Republicans will not allow us to pass [this week] and maybe not ever,” said one Senate Democratic aide familiar with the negotiations.

As a possible Plan B, Senate Democratic leaders might offer a much smaller proposal Friday: a $4 billion package to provide a 14-day extension of the programs scheduled to expire next week while Congress is gone, including unemployment benefits, COBRA health benefits, payments to Medicare doctors, SBA loans and flood insurance. (None of the proposals under consideration would create new tiers of unemployment benefits.)

Trouble is, the Democrats don’t intend to pay for the short-term extensions with offsets elsewhere in the budget, meaning that Republicans will almost certainly object. (GOP leaders don’t reject the policies, but they want them paid for with unspent stimulus funds — a notion that Democrats oppose.)

There, in a nutshell, is the source of the stalemate — a stalemate that will allow these benefit provisions to expire, and force Democratic leaders to try to forge a deal that can pass both chambers quickly when they return to Washington June 7. The bill they produce, said the Democratic aide, will likely be retroactive.

The bill would extend the filing deadline for the existing tiers of emergency unemployment benefits — not to be confused with the creation of additional tiers — through the end of 2010. Under current law, that deadline will arrive at the end of May, threatening to lock hundreds of thousands of jobless Americans into their current tier of benefits without the option of reaching the next level.

The Baucus bill — which will be released jointly by the House Ways and Means Committee — also includes emergency funding to extend COBRA benefits, to prevent Medicare doctors from being hit with a huge pay cut June 1, and to extend a tax credit encouraging mining companies to promote worker safety.

Additionally, the bill would “increase or eliminate” the cap on the Oil Spill Liability Trust fund, which is currently $1 billion.

Democrats will want to pass this package quickly (and the June 1 deadline on some of these provisions begs their urgency). But the bill has a long road ahead, as the appetite for deficit spending, particularly in the Senate, is at an historic low. And if Sen. Bob Bennett’s primary loss in Utah offered any warning to lawmakers up for re-election this year, it’s that voters — at least in some areas — have lost that spending appetite as well.

Because Coburn has prevented efforts to adopt the measure by unanimous consent, Democratic leaders last night filed for cloture on the bill — setting in motion the series of votes that would allow Senate lawmakers to pass the bill despite Coburn’s objections. Trouble is, it’s Friday before a two-week congressional vacation, and a good many lawmakers have already left town. Indeed, the office of Senate Majority Leader Harry Reid (D-Nev.) said this morning that just 11 Republicans are available to vote.

The flight of living, breathing senators means that the cloture votes likely won’t happen before Congress returns to Washington 18 days from now, the Reid spokesperson said.

Meanwhile, COBRA benefits expire April 1; a 21-percent cut in Medicare doctor payments is scheduled to take effect that same day; and the filing deadline for UI benefits arrives April 5.

Senate lawmakers will tweak the bill to make the extensions retroactive, Reid’s office said.

The Senate bill, the Post notes, “will be heavy on tax breaks designed to spur businesses to make new hires.”

Also of note: Unlike the House bill, the Senate proposal excludes an extension of unemployment benefits. Instead, the UI extension “may move” separately, the Post reports.

The bill includes $79 Billion for safety net programs (more than is actually supposedly dedicated to job creation), including:

* Extension of unemployment benefits through June of 2010;
* Extension of COBRA subsidies through June of 2010;
* Extension of Increased Medicaid Matching Rates (FMAP) from December 31, 2010 to June 30, 2011; and
* Extension of the refundable child tax credit to those with income less than $3,000 (under the original stimulus, families must have at least $3,000 in income to qualify).

Those are all pretty popular programs, and ones that voters would notice if they suddenly vanished. Attacking this stuff — and implying that a Republican majority would cut off these benefits — is something an opposition party can do, but something very hard to imagine a Republican congressional majority getting away with. See 1995 for evidence.

Nothing is set in stone, The Hill noted, and the final package could be larger or smaller, offset or not. Still, there’s starting to be some consensus on the $300 billion figure, which New York Times columnist Paul Krugman floated just a few weeks ago.

Rep. Jim McDermott (D-Wash.) (WDCpix)

To hear the Democrats tell the tale, the extension of jobless benefits enacted over the weekend will provide those living in high-unemployment states with an additional 20 weeks of insurance.

Well, not quite.

Because the bill was held up for so long in the Senate, an end-of-the-year filing deadline will prevent anyone from accessing the final six weeks of benefits, according to state officials and sources on Capitol Hill.

On Friday, President Obama signed into law legislation extending jobless benefits by 14 weeks nationwide, with an additional six weeks for those states where unemployment rates top 8.5 percent. Those benefits kicked in on Sunday. But there’s a glitch. The new law treats the 20-week extension as two separate extensions of 14 weeks and six weeks, with participants required to exhaust the first 14 weeks before applying for the next six. However, the current law keeps a Dec. 31 application deadline, roughly seven weeks from now, making collecting the full 20 weeks impossible.

[Congress1]That’s not all. The emergency unemployment benefits provided beginning in 2008 are also tiered. The filing deadline applies to all tiers. That is, the new extension would effectively grandfather the unemployed into the tier where they sit at the end of December, preventing them from jumping into the next, even if they were eligible.

As a result, some members of Congress are already eying another sweeping unemployment extension, which would both address the deadline glitch and provide additional help — well beyond the six weeks in question — to those unable to find work next year, when jobless rates are expected to hover near double digits.

The Orange County Register first reported on the deadline glitch last week.

In a state like California, where unemployment currently stands above 12 percent, that technicality would prove significant. Loree Levy, spokesperson for California’s Employment Development Department, said Monday that an estimated 92,000 residents had exhausted all of their available unemployment by the end of October, and roughly 285,000 will be eligible for the newly enacted benefits by the end of the year. Whether they can get 20 weeks or only 14, though, depends on whether Congress extends the filing deadline.

Some in Congress are well aware of the problem. The office of Rep. Jim McDermott (D-Wash.) said Monday that he’ll be pushing a proposal to provide as much as an additional year’s worth of jobless benefits. The proposal will be wrapped into a package to include other provisions designed to ease Main Street’s pain amid the downturn, including money to subsidize COBRA health benefits, as well as a provision to extend the full federal funding of a traditionally state-federal unemployment insurance program called FedEd, which got full federal funding under the stimulus bill. Without congressional action, states would again have to pick up part of the FedEd tab at the end of 2009.

McDermott doesn’t have an easy task. The pricetag for extending just the unemployment benefits for one year is roughly $80 billion, the McDermott aide said. With deficit spending having topped $1 trillion in the last fiscal year — and with an enormous health reform proposal in the works — the congressional appetite for expensive new proposals is hardly ravenous. Still, with national unemployment at 10.2 percent — and no wave of new jobs on the horizon — even the most ardent small-government conservatives would have a tough time voting against additional relief.

Update: The office of Senate Majority Leader Harry Reid (D-Nev.) confirms that Congress must pass another bill to guarantee the full 20-week extension.

While official Washington and much of the media focus on the great health-care struggle, the administration’s economic advisers have been busy reviewing proposals to create jobs, aware that pressure on them will grow to deal with high unemployment that threatens to persist through Election Day next year. President Obama’s aides insist that they knew all along that the original stimulus, as one of them put it, would “never fill the full gap from the recession.” Whether or not they anticipated this, they’re planning to act, even though — for political reasons — what comes next will not be called “a second stimulus.”

Instead, Democratic leaders are eying proposals more likely to gather support on both sides of the aisle, including an extension of the $8,000 new homebuyers’ tax credit, additional funding for unemployment insurance, Medicaid and food stamp assistance, and perhaps the launch of a new tax credit for businesses that hire new workers.

It won’t be easy. While employment figures are always among the last indicators to rebound from recession, the extent of the current job losses has caught many economists off guard. Indeed, the Labor Department last week revealed that employers shed 263,000 more workers than they hired last month, bumping the country’s unemployment rate to a 26-year-high of 9.8 percent. And experts on both sides of the aisle are predicting that the numbers will remain elevated through 2010.

If those projections play out, then the thorniest debates on the campaign trail a year from now will have very little to do with health care reform.