How Venomous is This COBRA? - January 9, 2009

If you were to lose your job today, would you be able to pay for your, or your family’s health insurance? Many would answer no to that, and with today’s release of the new unemployment rate, 7.2%, that number is increasing exponentially on a monthly basis.

In a report revealed today by Families USA, newly laid-off Americans will have to spend upwards of 30% of their unemployment benefits to help pay for their health insurance, and that’s just for an individual. If that person were trying to pay for a family coverage from their benefit package, then he or she would have to spend nearly 80% of their check in order to maintain healthcare coverage.

When a worker is laid-off, they may be eligible to maintain their coverage using a plan called COBRA, the Consolidated Omnibus Budget Reconciliation Act. COBRA gives those workers the right to continue their healthcare plan for a limited time as long as they pay for the premiums and an additional 2% administration fee.

Although this plan seems to be a great benefit at first glance, the program has astronomical costs and with limited cash provided to those recently laid-off, this plan is in need of serious reworking.

"On average, nationally, the monthly benefit for unemployment insurance is $1,278. The average COBRA monthly premiums for family coverage are $1,069," Ron Pollack, executive director of Families USA, stated earlier today.

Pollack went on to add, "Unemployed workers need either premium subsidies to help them afford COBRA benefits or temporary health safety-net coverage through Medicaid. The right to COBRA health coverage is a tragic ruse for millions of families whose breadwinner was laid off."

In fact, President-elect Obama has recently stated that he plans on initiating a program from his economic stimulus package that would extend unemployment benefits along with subsidizing healthcare programs for those that have lost their jobs. Obama plans on using some $80B as part of his plan.

Throughout the country, some 160 million people receive their healthcare plans through their current employers. In addition, more than 46 million people go day-to-day without any means of healthcare coverage what so ever. The remainders of those that receive health benefits, but don’t pay for it, are employed by the government.

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