It's worse than we thought. No not just the economy, although we say that pretty much every time we look at the headlines. We're talking about the cost of COBRA.

We've posted recently on the high cost of COBRA, and the relatively few people who lose their jobs who can afford to extend their job-linked health insurance this way (here and here). Congress is likely to include significant COBRA subsidies as well as more short-term Medicaid and SCHIP options in the stimulus package to help more people stay covered in the economic crisis. A recent Commonwealth Fund study suggests the problem is more severe than we thought; earlier studies put the COBRA take-up rate at about 12 to 15 percent, but Commonwealth finds that 2007 data suggests that only about one in 9 or 10 percent of unemployed workers have COBRA coverage. (Some are able to get on a spouse's health plan, or find alternative health coverage). Here's the summary:

As the U.S. economic downturn continues and job losses mount, more working Americans are likely to lose access to affordable health benefits subsidized by their employers. Analysis of the 2007 Commonwealth Fund Biennial Health Insurance Survey finds that two of three working adults would be eligible to extend job-based coverage, under the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA) if they became unemployed. Under COBRA, however, unemployed workers would have to pay four to six times their current contribution at a time of sharply reduced income. In fact, the latest national figures indicate that, because of high premiums, only 9 percent of unemployed workers have COBRA coverage.

Jane Sarasohn-Kahn notes in Health Populi the COBRA dilemma "illustrates the difference between need and demand." Without substantial subsidies, being unemployed will mean being uninsured. Commonwealth estimates that the subsidies need to be 75 percent to 85 percent of premiums. The stimulus bill is at 65 percent . That could still go up—or down—as the stimulus bill winds its way through Congress, although the COBRA provisions look pretty set at the moment. For the potential impact of subsidies on COBRA take-up rates see the chart below from the Commonwealth study:

The House is supposed to vote as early as today. The New York Times wraps up the COBRA and Medicaid components of the bill as it now stands, and analyzes how the crisis is changing the social contract..