WASHINGTON (Reuters) - A U.S. program aimed at helping unemployed people keep their health insurance costs so much it is largely unaffordable, a health consumer group said in a report released on Friday.
On average, health insurance plans available under the so-called COBRA program take up more than three-quarters of a worker’s government unemployment compensation, the non-profit Families USA reported.
“On average nationally, the monthly benefit for unemployment insurance is $1,278. The average COBRA monthly premiums for family coverage are $1,069,” Ron Pollack, executive director of Families USA, told reporters in a telephone briefing.
The U.S. unemployment rate hit 7.2 percent last month, the highest in nearly 16 years. Pollack said the millions of people who have become unemployed since the U.S. recession began in 2007 would be struggling to keep their health insurance.
Most Americans — 160 million — get their health insurance coverage via employers. Another 46 million have no health insurance and the rest are covered by government insurance.
COBRA — the Consolidated Omnibus Budget Reconciliation Act of 1985 — is meant to help workers and their families keep their health insurance if they lose their jobs. But Pollack said while they keep the coverage, they must pay for all of its cost plus 2 percent for administrative fees.
Surveys show about 18 to 26 percent of people eligible for COBRA use the program in any given year, the report said.
“For many, it would take their entire unemployment check and more to continue coverage for themselves and their families,” it said.
“However, if laid-off workers do not continue their employer-based coverage by electing COBRA and instead seek coverage in the individual health insurance market, those with health problems are likely to find that no insurer will sell them a policy that will cover their pre-existing conditions at any price,” it adds.
“The right to COBRA health coverage is a tragic ruse for millions of families whose breadwinner was laid off,” said Pollack.
“Unemployed workers need either premium subsidies to help them afford COBRA benefits or temporary health safety-net coverage through Medicaid,” he said, referring to the state-federal health insurance program for the poor.
The group used U.S. Department of Labor data to come up with its figures for the report, available here
Editing by Eric Beech