Monday, January 12, 2009

Coverage & Access

COBRA Coverage Too Costly for Many Unemployed, Analysis Finds

      Health insurance premiums under COBRA -- which allows recently laid-off workers to retain their group health coverage for as long as 18 months, provided that they pay 102% of the premiums -- take up between 30% and 84% of standard unemployment benefits, according to a report released on Friday by Families USA, the Washington Post reports (Connolly, Washington Post, 1/10). The report analyzed data from the Bureau of Labor Statistics on average unemployment benefits by state and information from the Agency for Healthcare Research and Quality on average COBRA premiums (Nylen, CQ HealthBeat, 1/9).

According to the report, average COBRA premiums for a family total $1,069 monthly and account for 83.6% of unemployment benefits, which average $1,278 monthly (Graham, "Triage," Chicago Tribune, 1/11). COBRA premiums for an individual on average account for about 30% of unemployment benefits, the report found (Washington Post, 1/10). In nine states, COBRA premiums for a family equaled or exceeded unemployment benefits, according to the report. The report also found that COBRA premiums for an individual accounted for more than 40% of unemployment benefits in six states (Freking, AP/Albany Times Union, 1/10).

Ron Pollack, executive director of Families USA, said, "COBRA health coverage is great in theory and lousy in reality" (Washburn, Bergen Record, 1/9). He added, "For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured" (CongressDaily, 1/9).

Call for Subsidies in Stimulus Package
Pollack and House Speaker Nancy Pelosi (D-Calif.) said that the report highlights the need to include subsidies for COBRA premiums in the economic stimulus package. Brendan Daly, a spokesperson for Pelosi, said, "Without that they simply cannot afford to pay for temporary continuation of their health insurance" (Washington Post, 1/10).

Senate Finance Committee Chair Max Baucus (D-Mont.) recently said that the stimulus package would include such subsidies (CongressDaily, 1/9). Cheryl Fish-Parcham, deputy director of health policy at Families USA, said that such subsidies could take the form of a refundable tax credit, direct payments from the federal government to health insurers or an increase in unemployment benefits (CQ HealthBeat, 1/9).

The report is available online (.pdf).