"The elimination of COBRA subsidies means that people losing their jobs will also lose their health coverage," Ron Pollack, Families USA's Executive Director says in the report. "Such a loss of health coverage flies in the face of the recently enacted health reform legislation that is intended to expand health coverage to tens of millions of people."
Earlier this week, Senator Sherrod Brown (D-Ohio) and Senator Bob Casey (D-Pennsylvania) introduced an amendment to extend the subsidy until November 30. They say that record unemployment qualifies as an emergency which calls for emergency spending.
They also argue that cutting unemployment benefits will slow economic recovery by forcing the jobless to cut spending on essential goods.
"COBRA without some kind of assistance is almost a cruel hoax," Brown tells ABC News.com, arguing that many Americans are not able to afford unemployed health insurance without a government subsidy.
Sen. Casey estimates that COBRA premiums would eat up 75 percent of the monthly unemployment payment for a Pennsylvania family.
"We're in the midst of a recovery but there are people still living through this nightmare of the downturn," Casey tells ABC News.com. "The last thing we want to do is pull the ladder out from under them."
On the other hand, Robert Book, a senior research fellow at the Heritage Foundation, says that such spending expands an already dangerously large budget deficit. And he argues that such subsidies encourage people to remain unemployed.
"Just like any other unemployment benefit, it reduces the incentive for people to find new jobs, so people remain unemployed longer than they would otherwise," he says.
Donna Lynch, a former business analyst who was laid off from Aetna last year, doesn't agree. Lynch recently survived breast cancer, and says she's lucky that she qualifies for the subsidy, which puts her premium at $250 for herself and her 9-year-old daughter. Because of her pre-existing condition, Lynch would find it almost impossible to buy insurance from a new provider.
"I'm looking for work every single day," she says. "The subsidy is a huge help. It has enabled us to pay our other bills."