Many of the millions of unemployed workers and dependents who received federal subsidies to help pay for health care coverage have lost those subsidies and are joining the ranks of the uninsured.
According to a report by the health care advocacy group Families USA, the subsidies --which were started last March by the American Recovery and Reinvestment Act (ARRA) but were made available for only nine months --have enabled millions of workers and dependents to afford so-called "COBRA" premiums needed to continue health coverage from their previous employer.
As part of the stimulus, the federal subsidies pay 65 percent of the cost of COBRA premiums. Nationwide, the federal subsidies for COBRA family coverage average $722 per month.
Without subsidies, the report finds, nationwide COBRA premiums for family health coverage will cost workers, on average, $1,111 per month-83.4 percent of the average ($1,333) monthly Unemployment Insurance (UI) checks they receive.
For the first recipients, who began receiving subsidies in March, the subsidies expired on November 30. For those who started receiving subsidies after March, the expiration will be nine months after their start-up date.
"When workers lose their jobs, they often lose their health coverage as well," said Ron Pollack, Executive Director of Families USA. "For millions of laid-off workers and their families, the federal COBRA subsidies have been a health-coverage lifeline. It is essential, therefore, that new jobs legislation extends those subsidies."
Pollack claims the pending health reform legislation would provide a permanent source of help to workers who have lost their jobs. He says the health reform bills pending in Congress would enable such workers and their families to obtain health coverage through a newly created marketplace, called an "exchange," and that families with low incomes would receive tax-credit subsidies to help pay the premiums.
According to the Families USA report, average monthly family COBRA premiums vary quite significantly from one state to another -- ranging from $979 in Idaho and $989 in Iowa to $1,232 in Minnesota.
The report also indicates that average monthly UI checks vary substantially from one state to another. The two states with the lowest average UI benefits are Mississippi ($839) and Alabama ($903), and the two states with highest benefits are Washington ($1,826) and Hawaii ($1,808).
In nine states, the average family COBRA premium exceeds the average UI benefit. In Mississippi, for example, the average monthly unsubsidized family COBRA premium is 22.4 percent higher than the average monthly UI check: The average family COBRA premium in the state is $1,027, while the average monthly UI check is $839.
The eight other states in which the average family COBRA premium exceeds the average UI check are: Alabama ($1,005 vs. $903); Alaska ($1,209 vs. $1,032); Arizona ($1,111 vs. $941); Delaware ($1,209 vs. $1,125); Florida ($1,147 vs. $1,010); Louisiana ($1,013 vs. $968); South Carolina ($1,090 vs. $1,061); and Tennessee ($1,112 vs. $975).
"As this report clearly indicates, middle-income families are hurting and there is a pressing need to extend COBRA before the end of the year," said House Speaker Nancy Pelosi (D-CA).
Any extension of the COBRA subsidy program will also likely make the subsidies available to newly-unemployed individuals, according to Families USA. Under the current program, people who lose their jobs after December 31, 2009, will not qualify for the subsidy.
The Congressional Budget Office and Joint Tax Committee estimated that approximately 7 million adults and dependent children would receive the COBRA subsidy in 2009. The Treasury Department is compiling data about how many workers received the subsidy, but a count of the people benefiting from the subsidy is not yet available.