As the unemployment lines grow longer by the month, a report released today reveals why many jobless folks will likely soon lose their health coverage as well.
On average, the cost to cover families under the Consolidated Omnibus Budget Reconciliation Act (COBRA) — the federal arrangement allowing laid-off workers to keep their employer-sponsored health plans by paying the full premium — consumes 84 percent of unemployment insurance (UI) benefits, according to the report by Families USA, a health care advocacy group.
In 41 states and the District of Columbia, family COBRA costs eat more than three quarters of UI benefits, the report says. In nine of those states, average COBRA premiums are as much as, or more than, the state’s average UI check.
An example: Michigan’s average UI benefit is $1,276, while the average cost to keep a family covered under COBRA is $1,075. Not much left, in that case, to pay the rent and feed the kids, leaving many with little choice but to drop the COBRA plan.
“COBRA health coverage is great in theory and lousy in reality,” Families USA Executive Director Ron Pollack said in a statement. “For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured.”
Pollack called for subsidies to help unemployed folks afford their COBRA coverage, or some temporary arrangement allowing jobless folks to access Medicaid benefits.
The problem will likely get worse before it gets better. The Families USA report arrives on the same day that the government released figures revealing that employers dumped 524,000 workers last month, bringing the number of 2008 layoffs to 2.6 million. Nationwide, the unemployment rate now stands at 7.2 percent — the highest in 16 years.
Democrats in Congress have been pushing for an extension of UI eligibility, but less frequent are the calls for increasing the size of the check. Yesterday, Rep. Jim McDermott (D-Wa.), chairman of the House Ways & Means Subcommittee on Income Security and Family Support, introduced legislation that would hike UI benefits by $50 per week.
Families USA has just made a case why lawmakers should consider such a strategy in the coming stimulus.
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