Workers Without Jobs May Soon Be Without Health Insurance

Increasing numbers of jobless workers struggling to find employment will lose a key benefit this month: Subsidies to continue their health coverage.

The American Recovery and Reinvestment Act of 2009 (ARRA) helped laid-off workers retain their job-based health coverage through COBRA by picking up 65 percent of premium costs for nine months. Typically, employees who lose their jobs would be required to pay the entire premium.

But ARRA dollars were meant to be temporary, and for those who elected to take this benefit when it first became available, that time has just expired. Individuals’ monthly premiums will increase from an average of about $140 to $409, as reflected in the 2008 California Employer Health Benefits Survey. A family will see its monthly premium jump from about $390 to $1,119. Furthermore, for those who lose their jobs after December 31, this subsidy will not be available at all.

It is unclear how many Californians will be affected by this change. The state estimates that California will collectively receive about $2.47 billion, helping more than 800,000 workers keep their coverage. At the time the ARRA was passed, the Congressional Budget Office projected the national unemployment rate would average 8.3 percent in 2009. So far, however, the unemployment rate through October has averaged 9.1 percent, and recovery remains a long way off. Without subsidies, Californians who cannot find work and are already struggling to pay for basic needs will need to choose between cancelling their health coverage or squeezing their dollars even tighter.

— Hanh Kim Quach

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