Millions of unemployed workers and their families are facing the prospect of becoming uninsured or paying four-figure monthly premiums to keep their health coverage as government-funded subsidies expire, according to a new report from Families USA.
Under the Recovery Act, passed earlier this year, the federal government has been subsidizing 65% of health insurance premiums under COBRA, the government program that allows unemployed workers to retain their employer-sponsored health coverage provided they pay both the worker and employer share of the premium.
The subsidy was available from 9 months from the day unemployed worker began COBRA coverage. People who obtained the subsidy when it first became available in March, tad to begin paying the full cost for COBRA starting on Dec. 1. And starting in January 2010, the subsidy will no longer be available for newly unemployed workers.
The loss of the subsidy effectively means that most of these families won't be able to afford keep their health coverage, according to Ron Pollack, executive director of Families USA, a consumer advocacy group that focuses on health care issues. For example, the average family premium for COBRA coverage is $1,111 per month, up from about $389 with the government subsidy. Many families with an unemployed worker can't afford that cost, Mr. Pollack said, since the average unemployment check is about $1,333 a month. In nine states, the average cost of family coverage under COBRA actually exceeds the average unemployment check, according to the Families USA report.
At a news conference accompanying the release of the report, Mr. Pollack urged Congress to pass legislation that would extend the COBRA subsidies for an additional 6 months. He added that the health reform proposal being debated in the Senate now would solve the issue permanently by allowing unemployed workers to purchase insurance through a regulated insurance exchange that includes subsidies for low-income Americans.