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Maintaining Health Insurance During a Recession: Likely COBRA Eligibility

 

As the U.S. economic downturn continues and job losses mount, more working Americans are likely to lose access to affordable health benefits subsidized by their employers. Analysis of the 2007 Commonwealth Fund Biennial Health Insurance Survey finds that two of three working adults would be eligible to extend job-based coverage, under the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA) if they became unemployed. Under COBRA, however, unemployed workers would have to pay four to six times their current contribution at a time of sharply reduced income. In fact, the latest national figures indicate that, because of high premiums, only 9 percent of unemployed workers have COBRA coverage. Substantial financial assistance of 75 percent to 85 percent of premiums could help laid-off workers maintain coverage. In addition, expansion of Medicaid and the State Children's Health Insurance Program would benefit low-income, laid-off workers and their families who are ineligible for COBRA.

 

 

 

 

Publication Details

Date

Citation

M. M. Doty, S. D. Rustgi, C. Schoen, and S. R. Collins, Maintaining Health Insurance During a Recession: Likely COBRA Eligibility, The Commonwealth Fund, January 2009.