More laid-off workers can’t afford COBRA - Kansas City Star

10.01.09

The pink slips pounding the American workplace are wiping out health coverage along with jobs.</p><p>That&#8217;s because most laid-off workers cannot afford to pay for temporary continuation of their health insurance through COBRA coverage, according to a report issued Friday by <strong>Families USA</strong>.</p><p>The COBRA report came out the same day the <strong>Labor Department </strong>announced that the nation&#8217;s unemployment rate jumped to 7.2 percent in December, the highest level in 16 years. The economy lost a net total of 2.6 million jobs in 2008.</p><p>Families USA, a consumer health advocacy organization, said the average national premium cost for family COBRA coverage gobbled up nearly 84 percent of average unemployment benefits in 2008. In Kansas and Missouri, the bite was 76.6 percent and 96.9 percent, respectively.</p><p>&#8220;COBRA health coverage is great in theory and lousy in reality,&#8221; Ron Pollack, Families USA&#8217;s executive director, said in a teleconference Friday. &#8220;For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured.&#8221;</p><p>The report comes as layoffs from the nation&#8217;s deepening recession are adding to the ranks of the uninsured &#8212; most recently estimated at nearly 46 million. President-elect Barack Obama wants to make health coverage accessible to all Americans through several proposed reform measures, including a National Health Insurance Exchange with a range of private insurance options.</p><p>There also are expectations that health-coverage assistance will be included in the anxiously awaited economic stimulus package to be crafted by <strong>Congress</strong> and the new administration.</p><p>The Families USA report focuses on COBRA coverage, which comes from the health provisions of the Consolidated Omnibus Budget Reconciliation Act of 1986. COBRA provides temporary coverage to workers and family members when group coverage is lost because of events such as layoffs. The coverage typically goes for 18 months. Recipients must pay 100 percent of the premium cost, plus a 2 percent charge for administrative costs.</p><p>The Families USA report said the national average monthly premium cost for family COBRA coverage was $1,069 in 2008, or 83.6 percent of the national average unemployment insurance benefit of $1,278 a month.</p><p>In Kansas, the average monthly family COBRA premium was $1,037, or 76.6 percent of the average Kansas unemployment benefit of $1,354 a month. The situation was worse for Missourians, who paid an average monthly premium of $1,049 for family COBRA coverage, or 96.9 percent of the average Missouri unemployment benefit of $1,083 a month.</p><p>In addition, Missouri was among 17 states in which individual COBRA coverage ate up more than a third of unemployment insurance payments. Specifically, Missourians paid an average $373 a month for individual COBRA coverage, or 34.5 percent of their unemployment benefits. Kansans shelled out average monthly payments of $361 for individual COBRA coverage, or 26.7 percent of their unemployment benefits.</p><p>Andrea Routh, executive director of the <strong>Missouri Health Advocacy Alliance </strong>in Jefferson City, said she was not surprised that Missouri&#8217;s numbers are worse than the national average.</p><p>&#8220;Our unemployment benefits are lower than the national average, and health insurance is expensive in Missouri,&#8221; she said.</p><p>Peter Hancock, a spokesman for the <strong>Kansas Health Policy Authority</strong>, noted that Kansas is doing better than most states in terms of COBRA affordability. But he said that distinction provided &#8220;small comfort&#8221; when it takes more than three-fourths of the average Kansas unemployment benefit to obtain family COBRA coverage.

Source: Kansas City Star, MO

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