A new study by the Commonwealth Fund shows 9 percent of newly unemployed workers took advantage of extended healthcare coverage available under the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 2006.
Unemployed workers who lose their health insurance face premium increases of 75 percent to 85 percent to maintain the coverage they had with their employer, the study said.
"Maintaining Health Insurance During a Recession: Likely COBRA Eligibility," by Michelle M. Doty, director of survey research at The Commonwealth Fund and colleagues, found only 38 percent of laid off workers were eligible to receive COBRA benefits. The majority of workers surveyed didn't receive health insurance through their jobs, work for small firms that aren't required to offer COBRA or are uninsured to begin with. Coverage options for low-income workers remain limited especially for childless adults because most lack a public coverage option.
The authors say policy-makers should consider temporarily expanding eligibility in Medicaid and the State Children's Health Insurance Program to unemployed adults with low incomes, with assistance for premium shares, to provide critical support to families.
Sixty-six percent of all current workers would be eligible to extend their health insurance under COBRA if they were laid off. But for most people, COBRA payments are unaffordable, about four to six times higher than the amount of money they contributed to their health insurance when they were employed. According to the report, millions of the eligible could keep their coverage if they could get assistance with their premiums, which average $4,704 per year for an individual and $12,680 a year for a family.
"Americans are losing their jobs at an alarming pace and this report clearly shows that many people cannot afford to take on the expense of COBRA just as they lose their income," said Commonwealth Fund President Karen Davis. "The number of uninsured Americans could grow markedly during this recession unless we take action to help unemployed Americans keep their healthcare coverage."