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Health 'benefit' mostly unaffordable Jobless unable to sustain insurance payments |
| Sat January 10th, 2009 |
BY MARC SILVESTRINI REPUBLICAN-AMERICAN
The avalanche of layoffs that has accompanied the national recession is not only burying workers' jobs but their health care coverage as well.
The average national premium costs for family COBRA coverage consume 84 percent of the average unemployment benefit check, according to a report issued Friday by Families USA, a national consumer advocacy group focused on health care reform.
The report was issued the same day the U.S. Labor Department reported that the number of unemployed increased to 11.1 million in December and the national unemployment rate ballooned to 7.2 percent, the highest rate in 16 years.
"COBRA health coverage is great in theory and lousy in reality," said Ron Pollack, Families USA's executive director. "For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured."
COBRA coverage stems from provisions of the federal Consolidated Omnibus Budget Reconciliation Act of 1986. The law requires employers to allow former workers to remain in the company's group health plan for a period of time, usually 18 months, as long as the workers pay the full cost of coverage plus a 2 percent administrative fee.
Though COBRA premium costs vary substantially from state to state, as do unemployment insurance benefits, the report says the average COBRA monthly premium for family coverage across the nation is $1,069, or 83.6 percent of the average monthly unemployment benefit, which is $1,278.
The report contained better but still disquieting news for individuals who lose their jobs and seek COBRA benefits to cover just themselves. The average COBRA monthly premium for individual coverage is $388, or 30.4 percent of the average monthly unemployment benefit.
In Connecticut, COBRA premiums for family coverage gobble up a slightly higher percentage of the average unemployment check. The average COBRA monthly premium for family coverage in Connecticut is $1,166, or 84.3 percent of the average monthly unemployment benefit of $1,383.
The average monthly premium for individual coverage in Connecticut is $415, or 30 percent the average monthly unemployment check.
In nine states — Alabama, Alaska, Arizona, Delaware, Florida, Louisiana, Mississippi, South Carolina and West Virginia — the average COBRA monthly premium for family coverage actually exceeded the average monthly unemployment benefit.
The state in which COBRA premiums take the biggest bite out of unemployment benefits is Alaska, where the average monthly premium for family coverage is $1,145, or 131.7 percent of the average monthly unemployment benefit of $869.
There are only six states in which the COBRA monthly premium for family coverage is less than 70 percent of the monthly unemployment benefit — Hawaii (49.7 percent), Massachusetts (67.9), Minnesota (69.9), New Jersey (68.7), Rhode Island (68.9) and Washington (67.8).
Among the 50 states, average monthly unemployment benefits range from $800 in Mississippi to $1,698 in Massachusetts.
The average monthly COBRA premiums for family coverage range from $885 in Hawaii to $1,191 in New Hampshire. The average monthly premiums for individual coverage range from $334 in Hawaii to $444 in Delaware.
"The right to COBRA health coverage is a tragic ruse for millions of families whose breadwinner was laid off," Pollack said. "Unemployed workers need either premium subsidies to help them afford COBRA benefits or temporary health safety-net coverage through Medicaid." |
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