Laid-off Utahns could lose coverage

The ranks of uninsured Utahns are set to swell as a nine-month federal stopgap subsidy to laid-off workers who still want to be covered through their former employer's health-care plan runs out.

Only a few hundred Utahns are estimated to have taken advantage of the subsidy, approved this past February by Congress to help workers pay to stay covered by their group insurance plan under the Consolidated Omnibus Budget Reconciliation Act, or COBRA. The number of people nationwide who signed up for the COBRA subsidy is unknown, although the Congressional Budget Office in February estimated about 7 million adults and children would likely benefit.

The number of Utahns without coverage continues to grow, with advocates and state agencies estimating a total of about 325,000.

"COBRA at best is a rarely used option because people who have lost their jobs can't shoulder the entire premium plus the 2 percent processing fee required under COBRA," Ron Pollack, executive director of the health policy research and consumer advocacy group Families USA, told reporters during a national teleconference Tuesday.

The subsidies, which were included in the American Recovery and Reinvestment Act, paid 65 percent of COBRA premiums. In Utah, that means the $1,065 average COBRA premium would actually cost someone receiving the subsidy $373, or $692 less.

Utahns who have lost their jobs and are on unemployment have little to no chance of continuing health-care coverage without the subsidy, given that unemployment benefits are slightly higher that the cost of the average COBRA premium, Pollack said.

People on unemployment in Utah on average receive $1,378 a month, about $300 more than a full COBRA premium, according to Family USA figures.

"That doesn't leave much to pay for food, shelter and the other necessities of life," Pollack said.

Nationwide, the federal subsidies for COBRA family coverage average $722 per month. Without subsidies, a new report released Tuesday by the group shows, COBRA premiums for family health coverage will cost laid-off workers $1,111 per month on average, or 83.4 percent of the average ($1,333) monthly unemployment insurance checks they receive.

COBRA would in effect go away under new health-care reform legislation. It proposes creating an insurance exchange for people between jobs. Instead of continuing the group coverage of the previous employer, they could use the exchange to find individual or small group coverage for a lot less money. Workers who make too much to be covered by Medicaid or individual insurance subsidy plans offered by states would have a new government option to get coverage.

"The problem is what do people do in the meantime," Pollack said, noting that even if Congress approves reform, the changes won't take effect for several years.

In the immediate future, before it takes its Christmas break, Congress must extend the subsidy and could do so by making it part of the jobs legislation it is considering this week, Pollack said.

"The numbers aren't known exactly, but the unemployment rate is rising, people are forced to drop coverage completely," he said. "That can mean complete financial ruin for a family, either through a catastrophic accident or disease or by simply putting off a doctor's visit they can no longer afford, then end up in the emergency room with a more serious and often much more expensive problem."

e-mail: jthalman@desnews.com