What was positive in theory back in 1986 became a dark reality for health insurance policyholders. When the U.S. government first enacted the Consolidated Omnibus Budget Reconciliation Act (COBRA) legislation to help provide the unemployed with access for up to 18 months of continued medical insurance coverage, the premiums passed along to the unemployed were not discounted; in reality, they carried a 2% additional administrative fee. There were fewer unemployed then; compared to today’s unemployment rate of 9.7%, the average unemployment rate in 1986 was a paltry 7.0%, reports the U.S. Department of Labor’s Bureau of Labor Statistics.

In 2009, the Obama administration, by way of the economic stimulus plan, devoted $24.7 billion in COBRA subsidies to allow American workers who lost their jobs between September 1, 2008 and December 31, 2009 to receive a 65% subsidy on their state-rated COBRA plans—thereby enabling them to continue health insurance coverage for up to nine additional months.

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