Health care subsidies pushed for the jobless

By Bobby Caina Calvan - bcalvan@sacbee.com

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By law, losing a job usually cannot mean losing company health insurance. But the unemployed often find that coverage too expensive, leading them to gamble with their health and finances.

Now, health care advocates are urging the federal government to act on a proposal to provide subsidies that would pay for at least half of COBRA premiums for those who have lost jobs since September.

The House has approved $40 billion in subsidies, while the Senate is considering $21 billion – and negotiators in the coming days will have to reconcile their differences as part of the sweeping federal stimulus package.

Call The Bee's Bobby Caina Calvan, (916) 321-1067.

"The big issue is how completely unaffordable COBRA is," said Anthony Wright, executive director of Health Access California. "When people are in between jobs, that's the exact wrong time to ask (them to pay) a hundred percent of their premiums."

When Congress passed the landmark Consolidated Omnibus Budget Reconciliation Act (COBRA) in 1985, it included a safety net for laid-off workers. The law, which took effect the following year, allows those laid off from companies with more than 20 employees to continue group health coverage, typically for up to 18 months, if they bear the full cost of premiums.

For those suddenly living on unemployment checks, that's an expensive proposition.

Meredith Putman had top-of-the-line health insurance as an administrator for a Sutter County school district. When she lost her job in June, she found herself in a quandary.

At 60, Putman felt it was too risky to go without coverage. But living on $405 a week in unemployment benefits, she couldn't afford to pick up the full $800 a month for the school district's health plan.

"It's a major ordeal to find that your job had been dissolved, then to think I would be losing my health insurance," said Putman, who remains unemployed. "It was a really hard thing to figure out what I was going to do."

In the end, she opted for private insurance for less than half the cost, but far less comprehensive coverage.

Her deductible of $3,500 virtually makes her coverage useless, Putman said. Even routine care, including vision and dental, comes out of her pocket.

She keeps paying for medical insurance, she said, to protect herself in case of a major illness or accident.

Nationally, two-thirds of the country's 119 million workers would be eligible for COBRA coverage if they were to lose their jobs, according to the New York-based Commonwealth Fund, a health care think tank.

But a mere 9 percent of those with company insurance who lost their jobs in 2007 chose to continue that coverage, according to a study that the think tank released last month.

"What this really points to is how few people are helped by COBRA coverage," said Michelle Doty, one of the study's authors. "The premiums are too high."

Such issues are particularly perplexing in California, one of the states where unemployment is soaring.

California's unemployment rate hit a 15-year high of 9.3 percent in December – more than two percentage points above the U.S. unemployment rate. That rate is expected to climb when the state releases the latest jobless numbers later this month.

Since September, California has lost at least 174,000 jobs – 7,600 of those in the capital area, according to state employment numbers.

For a typical American family, enrolling in COBRA means spending $1,069 for monthly premiums, according to Families USA, a Washington-based health care advocacy group. For individual coverage, the average COBRA premium last year was $388.