Great satirical essay by Jonathan Rauch in the National Journal.  Hits many items of what’s wrong with health care delivery in the US.

Late Saturday night (December 19th), the Senate passed the Department of Defense Appropriations Act, which contained in Section 1010 an extension of the COBRA subsidy first introduced in 2009′s ARRA stimulus bill.  Thus, Congress has passed, and the President is expected to sign, the extension of the COBRA subsidy.

There are a number of significant changes made to the original COBRA subsidy:

1. The date by which an Assistance Eligible Individual (AEI) was required to be involuntarily terminated was extended from December 31, 2009 to February 28, 2010.
2. In a significant change from the original, the loss of health coverage by the end date of the subsidy is no longer required.  Under the original law and its interpretation by the Department of Labor, not only did the involuntary termination have to occur before December 31, 2009 (now February 28, 2010), but the AEI also had to lose health coverage prior to that date.  Now, the date of involuntary termination ONLY will be determinative for eligibility for the subsidy.
3. The maximum duration of the COBRA subsidy is extended from nine months to 15 months.
4. AEIs who dropped COBRA coverage because of the end of the original subsidy must be given the opportunity to reinstate coverage retroactively once they are notified of the new extension provisions and pay their portion of the applicable COBRA premium.
5. There is a new notice requirement for those AEIs who lost or elected not to continue COBRA coverage after their subsidy expired.  There is also a new notice for all terminated employees (whether voluntary or involuntary) on or after October 31, 2009 incorporating the changes from the Defense Appropriations Act changes.  It is expected that new regular COBRA event notices will begin incorporating the new notice requirements in very short order.

In an unusual move, the House will consider the COBRA subsidy (and eligibility) extension as part of the House Amendment to the Senate Amendment to HR 3326 (the Department of Defense Appropriations Act, 2010).  The applicable provisions can be found  here as Section 1010 at page 153.

If enacted in its current form, the new COBRA subsidy would:

1. Change the end date of eligibility for the ARRA subsidy from December 31, 2009 until February 28, 2010
2. Expand the duration of the ARRA subsidy period from the current nine months to 15 months
3. Allow a period for the retroactive payment of COBRA premiums for Assistance Eligible Individuals (AEIs) whose subsidy period expired November 30.  This would apply to all who were initially eligible for the subsidy on March 1, 2009.  The retroactive period would be 60 days starting on the enactment of the new provision, or if later, 30 days after provision of a new notice to COBRA qualified beneficiaries.
4. Require a special Notice to all AEIs who are on COBRA on or after November 1, 2009 whose qualifying event is a termination of employment (whether voluntary or involuntary) occurring on or after November 1, 2009.  This new Notice would describe the new 15 month subsidy.
5. Lastly, if enacted as written the extension would modify the original ARRA subsidy and subsequent interpretation by DOL that both the involuntary termination date AND the loss of coverage must occur within the subsidy eligibility period.  The new provision would only require that the involuntary termination occur before February 28, 2010, regardless of when the COBRA coverage period was to begin.

Stay tuned for whether Congress passes the extension, and if this is the final form of such an extension.