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Health Benefits to Expire, Worries Thousands of Unemployed Workers

December 1, 2009

Washington - Amid the high unemployment rate and weak labor market in the US, a federal bill that subsidizes 65 percent of the health insurance of unemployed workers will expire on Dec. 31.

Last February, President Barack Obama signed a stimulus bill that reduces the cost of COBRA, a federal program that allows employees to continue their employer-provided health benefits after leaving their jobs.

After conducting a survey, advocacy group Families USA said that unemployed workers who will lose the federal subsidy will have their monthly premiums increase from $389 to $1,111, an amount that would consume more than 83 percent of the average unemployment benefits, leaving little money for basic subsistence such as food, clothing, electricity, and shelter.

In nine states including Tennessee, South Carolina, Mississippi, Alabama, Arizona, Florida, Alaska, Louisiana, and Delaware, the costs of premiums will be higher than the unemployment checks.

The group believes that the number of uninsured Americans is expected to reach all-time high after the expiration of the COBRA subsidy.

While majority of unemployed workers will lose the federal subsidy in Dec. 31, those who received this last March will lose the assistance on Tuesday.

To address the issue, several lawmakers are proposing a new bill that will extend the COBRA subsidy for another six months, a period in which experts believe the labor market will improve, allowing unemployed workers to find new jobs.

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