Report: Laid-off workers can't afford COBRA health coverage

Miami HeraldJanuary 9, 2009 

Most laid-off workers can't afford to keep health insurance, according to a study from a Washington consumer group released Friday morning.

The report, by Families USA, shows that monthly payments of COBRA, the coverage available to those who lose their jobs, eats up far too much of unemployment benefits to be practical.

In Florida, the average monthly family COBRA premium is $1,037, which is more than the average monthly unemployment benefit of $1,013. For an individual policy in Florida, COBRA is $371 monthly -- more than a third of the unemployment check.

Ron Pollack, president of Families USA, said, ''COBRA health coverage is great in theory and lousy in reality.'' He called the program a "tragic ruse.''

The Consolidated Omnibus Budget Reconciliation Act of 1985 allows employees leaving a company to continue to receive their employer-based health coverage for a year or more but only if the worker pays the entire premium.

That proves too expensive for most people, the study reported. Shopping in the individual market to purchase policies can also be hard, particularly for those who most need coverage.

''Those with health problems are likely to find that no insurer will sell them a policy that will cover their preexisting conditions at any price,'' said the report, entitled, "Squeezed: Caught between Unemployment Benefits and Healthcare Costs.''

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