Mr. SCHIFF. Mr. Speaker, today I am introducing the COBRA Coverage Act of 2003. As you may know, our Nation's faltering economy has resulted in staggering unemployment, unemployment that has risen from 5.7 percent in January of this year to 6.4 percent in June, leaving millions of Americans out of work. The loss of one's job is often accompanied by the loss of employer-based health coverage and the ability to afford individual health insurance. In this time of economic hardship, we must act to make health care more accessible to the working and middle-class families of America.
In an attempt to reduce the growing population of those without health coverage, Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) provided access to group health insurance for workers who had lost their employer-sponsored coverage. COBRA requires employers who offer health insurance to continue coverage for their employees under circumstances such as a change in their employment status. However, this law allows the employer to charge up to 102 percent of the premium for the covered beneficiary and up to 150 percent for disabled individuals who qualify for an additional 11 months of coverage.
The Kaiser Family Foundation estimates that in 2002 health care premiums increased by 12.7 percent, making the average cost for self-only coverage $3,060 while the average cost for the family coverage reached $7,954. These high costs make retaining health coverage extremely difficult for individuals without work, without an income. As a result many people and their families choose to go without health insurance until they find another job. This is unacceptable.
Not only do these prohibitive costs prevent people from maintaining their health coverage, they can also drive up the group costs of employers who offer COBRA coverage. Because health care premiums are so high, those who have costly, preexisting health problems are more likely to enroll in extended coverage than those who are healthy. These costs are often passed onto the employer and onto the others covered by the group insurance.
We can alleviate this problem by making COBRA health coverage more accessible and more affordable. With the COBRA Coverage Act of 2003, laid-off workers would be provided with a 50 percent tax credit toward the cost of COBRA coverage, up to a maximum of $110 for an individual and $290 for a family per month. This credit is entirely refundable, which means one can receive it regardless of one's tax liability, and it is advanceable, meaning that it's available to the recipient immediately. This is possible because the tax credit would be administered through the employer.
While we work diligently to improve our economy, we must not sit idle and turn our backs on the millions of uninsured Americans. We must assist those who are suffering by ensuring they retain access to affordable health insurance for themselves and for their families.