Americans Unprepared for Health Insurance Costs as Unemployment Rises, According to New Survey

MOUNTAIN VIEW, CA, Apr 02 (MARKET WIRE) --
Four out of five (81%) employed Americans are not feeling extremely
confident about job security, and, if they were to lose their job, many
are not prepared for the health insurance costs awaiting them, according
to a new consumer survey commissioned by eHealthInsurance, the leading
online source for individual and family health insurance.

The national poll conducted by global insights firm Kelton Research
surveyed Americans aged 18-64 and found that almost two in three (65%)
predict they'd be unable to afford health insurance for longer than 6
months, if at all, if they lost their jobs and had to use their current
savings. Nearly a third (32%) admit they wouldn't be able to afford it at
all.

Driving this consumer sentiment is an awareness gap between the perception
and reality of employer-based and individual health insurance costs, the
survey reveals:

-- Perception: Almost two in three (64%) who are covered through their
jobs have no idea what their employers contribute towards their health
insurance on a monthly basis. Another 27% of insured Americans don't even
know how much they pay themselves in an average month for health insurance.
-- Reality: According to Kaiser Family Foundation, the average employer
contribution in 2008 for covered workers was $332 per month for individuals
and $777 per month for families.(1) If laid off and opting for COBRA
insurance, former employees will have to shoulder the combined employer
contribution, employee contribution, and an estimated 2% administrative
cost. That is an estimated $400/month for individual COBRA coverage and
$1,078 for family COBRA coverage. Fortunately for some qualified
individuals, the federal government is providing a 65 percent subsidy on
the cost of COBRA premiums for up to 9 months.(2)

-- Perception: Just 26 percent are aware that private health insurance is
typically less expensive than COBRA coverage.
-- Reality: The average health insurance premium for an individual was
$158 per month and $366 for a family, according to a 2008 eHealthInsurance
study of 227,000 active policies.(3) Excluding those eligible for the
federal COBRA subsidy, private health insurance can be as much as 60% lower
than average COBRA premiums. Even with the 65% subsidy, COBRA coverage may
still be prohibitively expensive, especially if you're surviving on monthly
unemployment benefits.

-- Perception: One in two (50%) Americans with insurance doubt that if
they lost their current coverage, they'd be able to find similar coverage
with another plan. And if they had to apply for a new health plan for any
reason, the average insured American estimates a 31 percent chance they'd
be declined.
-- Reality: There are many benefit-rich plans in the individual market
from the same name-brand health insurance providers that employers use. A
2008 eHealthInsurance study of 227,000 private health insurance
policyholders showed that a vast majority of individual and family
policyholders had lab x-ray, emergency, prescription and chiropractic
coverage and that the average plan lifetime coverage limit was $3.9
million.(3) Qualifying for coverage in the individual market is a real
issue, but it's not as challenging as consumers make think. According to a
2007 study from America's Health Insurance Plans (AHIP), 88.7% of
individual health insurance applicants were offered coverage, with 11.3%
declined or not offered coverage for various reasons.(4)

-- Perception: While some Americans are tightening the belt, not everyone
is prepared to make the financial sacrifices required to stay covered.
According to the survey, only about half of Americans would be willing to
cut back on certain expenses such as cell phone payments (53%) and cable TV
(49%) in order afford health insurance.
-- Reality: Making sacrifices in the short term can save consumers money
in the long term. A 2005 Harvard University study found that the average
out-of-pocket medical debt for those who filed for bankruptcy was $12,000
and that over half of all bankruptcies were partly the result of medical
expenses.(5)

Some additional insights from the survey include:

-- Over one in three (34%) who are employed right now think they're more
likely to lose their job than get a raise in the next year.
-- Almost four in five (79%) of those with employer-provided health
insurance would be more willing to cut back on or give up their vacation
time than their health insurance coverage.
-- Just four in ten (40%) would be willing to pay $200 or more per month
to insure themselves or their family if they lost their current jobs.
-- Those currently covering three or more people on their health plan
would be willing to part with about $318 per month for insurance if they
found themselves unemployed, compared to an average of $169 for Americans
covering less than three people if they were to find themselves in the same
situation.

For a complete summary of survey data and methodology, go to:
http://www.ehealthinsurance.com/unemploymentsurvey.

Sources:

(1) Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 2008,
http://ehbs.kff.org/images/abstract/7791.pdf

(2) For more information on the COBRA subsidy and eligibility, go to:
http://www.dol.gov/ebsa/newsroom/fsCOBRApremiumreduction.html

(3) Average premiums and benefits listed are from August, 2007 based on
plans purchased through eHealthInsurance active as of that date. More
information and a complete methodology of the study can be found in
eHealth, Inc.'s 2008 report: Cost and Benefits of Individual and Family
Health Insurance Plans:
http://www.ehealthinsurance.com/content/expertcenterNew/eHealthCBreport2008FINAL
pdf

(4) AHIP Center for Policy Research, Individual Health Insurance
2006-2007: A Comprehensive Survey of Premiums, Availability, and
Benefits, Individual market, analysis of offer rates, 2006, p.11:
http://www.ahipresearch.org/pdfs/Individual_Market_Survey_December_2007.pdf

(5) Himmelstein, D, E. Warren, D. Thorne, and S. Woolhander, "Illness and
Injury as Contributors to Bankruptcy," Health Affairs Web Exclusive W5-63,
02 February, 2005; also cited at http://www.nchc.org/facts/cost.shtml

About eHealth, Inc.:

eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance,
the nation's leading online source of health insurance for individuals,
families and small businesses. Through the company's website,
http://www.ehealthinsurance.com, consumers can get quotes from leading
health insurance carriers, compare plans side by side, and apply for and
purchase health insurance. eHealthInsurance offers thousands of health
plans underwritten by more than 180 of the nation's health insurance
companies. eHealthInsurance is licensed to sell health insurance in all 50
states and the District of Columbia. eHealthInsurance and eHealth are
registered trademarks of eHealthInsurance Services, Inc.

For more information about individual and family health insurance plans as
an alternative to COBRA insurance, please contact:

-- A licensed eHealthInsurance agent at 1-800-977-8860
-- Or go online to www.COBRALearning.com

For information about public programs please contact:

-- The Foundation for Health Coverage Education (FHCE) at 800-234-1317
-- Or go to their web site is www.coverageforall.org

For media inquiries, please contact:

Brian Mast
eHealth, Inc.
(415) 609-8494
brian.mast@ehealth.com

Sande Drew
eHealth, Inc.
(916) 207-7674
sandrew@surewest.net

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