Millions Of Workers Who Lost Their Jobs Are Without Health Insurance, USA

February 11, 2009 at 2:00 pm Leave a comment

A new report shows that millions of workers who lost their jobs are losing their health coverage. According to the report, only one out of five (20.8 percent) unemployed workers, now with low or moderate incomes, have private or military health coverage.

The report, by the health consumer organization Families USA, was issued on the same day that the government released its latest statistics documenting how many people were unemployed in January 2009. The U.S. House of Representatives last week adopted an economic recovery package that includes health coverage relief for laid-off workers, and the Senate is now considering relief measures as well.

The new report focuses on middle-class and lower-income workers with annual incomes below 200 percent of the federal poverty level ($44,100 in annual income for a family of four). These workers represent half of unemployed workers under 65 years of age and are the most vulnerable economically and at the highest risk of being uninsured. It is this group that is intended to receive special health coverage relief in the economic recovery bill passed by the House (H.R. 1, the American Recovery and Reinvestment Act of 2009).

Despite their modest incomes, only one in four (25.2 percent) unemployed workers with incomes below 200 percent of poverty receive health coverage through public safety-net programs such as Medicaid. As a result, more than half (54.0 percent) of unemployed workers with incomes below 200 percent of poverty are uninsured.

“Losing a job often means losing health coverage,” said Ron Pollack, Executive Director of Families USA. “Most laid-off workers can’t afford COBRA coverage and do not qualify for public health safety net programs, and, as a result, millions of middle-class and lower-income workers become uninsured.”

The data for the Families USA report were compiled by the Lewin Group, a well-respected health analysis organization, based on U.S. Department of Labor and Census Bureau sources.

According to the report, in virtually every state in the nation, more than half of unemployed workers with family incomes below 200 percent of poverty are uninsured. This is largely due to two factors.

First, many lower-wage workers do not have COBRA protections-the right to continue their employer-based insurance coverage if they pay the entire premium out of their own pocket. And for those workers who do have a COBRA option, the premium is often unaffordable. Average premiums for COBRA coverage consume more than 30 percent of average unemployment insurance benefits for individual coverage and almost 84 percent for family coverage.
Second, state Medicaid eligibility levels for adults are very low. For parents, eligibility levels in many states are significantly below the federal poverty level. In fact, even a meager unemployment check can make them ineligible for the program. According to the report, “…in 43 states, Medicaid is simply not available for adults without dependent children unless those adults are permanently disabled. Even if those adults are penniless, they are ineligible for Medicaid.”

The House bill is designed to address these problems. It provides a 12-month subsidy for laid-off workers that pays for 65 percent of COBRA premiums; the Senate bill does likewise, but only for a period of nine months.

Many laid-off workers are ineligible for COBRA either because their previous employer has gone out of business or it has fewer than 20 employees. Recognizing the gap in both availability and affordability of COBRA for moderate- and low-income families, the House bill also establishes temporary Medicaid eligibility for laid-off workers and families relying on unemployment benefits or with incomes below 200 percent of poverty, a measure that is not included in the Senate bill.
At the same time that Families USA released its report about the health insurance status of laid-off workers with incomes below 200 percent of poverty, it also released a consumer guide for laid-off workers to help them retain health coverage. The guide is designed to provide advice to newly laid-off workers so that they can better understand the potential opportunities and obstacles for retaining health coverage.

Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.




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