My last column on the COBRA provision of the House stimulus package struck a nerve with Business Finance readers. But to anybody who hasn’t slept through the last few years, it should come as no surprise. Older workers (who are still shy of Medicare age), who’ve always depended on the employer-based healthcare system and who’ve lost or fear they’ll lose their jobs, are running scared. They face a triple whammy: They’re unlikely to get another job that provides health insurance, can’t qualify for or afford private insurance — and often can’t afford COBRA’s current high costs.

But in the Senate version of the stimulus package, which was cleared for final voting today, the COBRA provision is somewhat different than the House bill. Still, some form of COBRA subsidization is likely to be in the final legislation because, according to Capital Checkup, it’s less controversial than other provisions of the stimulus package.

Most of the people who posted comments to my column support the House COBRA provision. It would extend COBRA eligibility to those who lose employer coverage between September of last year and the end of this year, are 55 or older, or have been with the same employer for ten years. Those individuals could elect to stay on COBRA until they become Medicare-eligible, paying 35% of the cost of coverage for the first year. Employers would cover the rest but would get that money back from the government via a payroll tax refund.

But some business groups say that the COBRA changes could drive up the costs of employer-provided healthcare so much that, if passed, it could threaten the future of the employer-based system. According to a statement from the Republican Party, “This expansion would essentially turn COBRA into a pre-Medicare health entitlement program and could threaten the ability of employers to offer health insurance to their employees due to higher costs. … During such challenging economic times, it is not prudent to impose substantial new financial burdens on employers.”

Not quite that simple, according to one Business Finance reader, who contends that the sickest people (those who use the most medical services and are most likely to drive up costs) aren’t the ones who would continue COBRA benefits: “The highest proportion of people electing to continue on COBRA benefits between 55 and 65 will be those who are healthy and wealthy enough to retire. Those people will have voluntarily removed themselves from the workforce, creating room for younger workers.” ###