Enrollments in COBRA (health continuation coverage) rose from less than 20 percent to nearly 40 percent since the U.S. government enacted a new subsidy program, according to a report by Hewitt Associates, a consulting firm.

Signed into law in February 2009, the American Recovery and Reinvestment Act of 2009 (ARRA) provides for a 65 percent subsidy for COBRA continuation premiums for up to 9 months for workers who have been involuntarily terminated. To qualify for the subsidy, individuals must have a qualifying event for COBRA coverage that is the employee's involuntary termination during the period beginning September 1, 2008 and ending December 31, 2009.

Hewitt looked at COBRA enrollment activity for 200 large employers both before and after the enactment of the program. From March 2009 to June 2009, monthly COBRA enrollment rates for Americans eligible for the subsidy averaged 38 percent, up from 19 percent for the period of September 2008 through February 2009.

Hewitt estimates that without the subsidy, the average worker would spend $8,800 a year in COBRA healthcare costs. With the subsidy, the average worker would spend about $3,000 a year.

"The COBRA subsidy significantly reduces the cost of healthcare coverage for workers who were laid off,” said Karen Frost of Hewitt. “However, the average American may still find it difficult to pay for this benefit when they have less income coming in, which is perhaps why enrollment numbers didn't jump higher,. It's possible these laid off workers are simply seeking coverage with a new employer or through their spouse's employer. Unfortunately, it's also likely that some are just foregoing health insurance altogether."