For Many Unemployed, COBRA Coverage Is Out of Reach

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<p>As the unemployment rate reaches its highest level in 16 years, a <a href="/publications/issue-briefs/2009/jan/maintaining-health-insurance-during-a-recession--likely-cobra-eligibility
">new Commonwealth Fund analysis</a> finds that only a small proportion of laid-off workers--9 percent--purchase COBRA health insurance coverage.<br><br>COBRA premium payments are about four to six times higher than the amount laid-off workers contributed to their health insurance when they were employed. According to Fund researchers, unemployed workers who lose their health insurance would need substantial financial assistance--covering 75 to 85 percent of their health insurance premiums--for their premium contributions to remain at the levels they paid while they were working.<br><br>Enacted by Congress in 1985, COBRA--the Consolidated Omnibus Budget Reconciliation Act--allows laid-off workers to retain their employer-based coverage but requires them to pay both the employer and employee shares of the insurance premium. For households dealing with a job loss, such a financial burden can be insurmountable.<br><br>The analysis, prepared by a team of researchers led by Michelle M. Doty, the Fund's director of survey research, also finds that low-wage workers are at a particular disadvantage, since many don't have health insurance through their job--or any insurance at all--or work for small firms that aren't required to offer COBRA. To reach more low-income workers and their families, researchers recommend that policymakers consider temporarily expanding Medicaid and SCHIP eligibility to unemployed adults with low incomes and provide assistance with premium costs.<br><br>"The number of uninsured Americans could grow markedly during this recession unless we take action to help unemployed Americans keep their health care coverage," said Commonwealth Fund president Karen Davis.<br><br>Please share your views on the study by using our online commenting feature.</p>