Back when COBRA came into being in 1986, it was hailed as a tremendous benefit to workers who would now be able to continue their group health insurance benefits even if they left their job. The catch is that the employer no longer pays any of the premiums once you leave your job. COBRA still provides the same benefits that it always has, but health insurance premiums have risen far faster than inflation over the years, and very few people can afford to continue their group health insurance premiums via COBRA. This is especially true for people who were not expecting to be unemployed and have become victims of the recession-driven wave of layoffs. Health Populi has some details about this situation, including the fact that only one in nine unemployed people elect to continue their health insurance benefits under COBRA.
Here in Colorado, I spoke with a client recently who got a quote for $1450/month to continue her family’s health insurance through COBRA. She pointed out that this was quite a bit more than her mortgage payments, and was completely impossible for her family. Luckily her family is healthy and can qualify for individual health insurance, which will be far less expensive.
COBRA is still a beneficial law that (in theory) protects access to health care. But when it comes time to sign and return the paperwork to continue coverage, most people realize that there just isn’t room in the budget. This is especially true for workers who have been laid off and are struggling to make ends meet. Unemployment numbers are heading steadily in the wrong direction (in Colorado, unemployment hit 6.1% in December, the highest it’s been in five years). I’ve seen lots of conflicting reports about the economic stimulus bill and whether the final version (if passed) will contain relief for unemployed Americans struggling to pay for health insurance under COBRA. Without such a measure, the number of uninsureds will likely be higher this year than ever before.
Thanks to Health Business Blog for hosting last week’s Health Wonk Review, where I found the article from Health Populi.