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Florida is one of nine states in the U.S. where the cost of obtaining family health care coverage through COBRA exceeds the cost of unemployment insurance benefits, according to a report released Friday by Families USA. The report comes on the heels of a U.S. Department of Labor report that says the nation's unemployment rate rose in December to 7.2 percent, the highest rate in 15 years.
"COBRA health coverage is great in theory and lousy in reality," Families USA Executive Director Ron Pollack said during a press conference Friday morning. "For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured."
The report found that while the average monthly unemployment insurance benefit in Florida is $1,013, the average COBRA premium for family coverage is $1,037 – absorbing 102.2 percent of the unemployment insurance benefit. For an individual, COBRA premiums average $371, or 36.6 percent of the unemployment benefit. COBRA allows certain people to obtain health care coverage from their previous employer for up to 18 months after getting a pink slip.
"It's a tragic rouse for millions of families whose breadwinner was laid off," Pollack said. However, President-elect Barack Obama's stimulus package does address the problem and, Pollack noted, does include some "significant potential relief" for people who are temporarily unemployed to enable them to get coverage.
"It's going to be important for the president and Congress to deal with health care reform," he said. "We believe that the president and congressional leaders will make this broader health care reform the next priority, after the recovery package is completed." Pollack expects that might be about March. "For any reform package to be meaningful, it would have to deal with the ever-growing cost of health care," he said.
Laid-off employees trying to keep their family's job-based health insurance through COBRA often find it's no help financially: A new study found the coverage can cost more than they make in jobless benefits, especially in Florida.
The average COBRA policy for a Florida family costs $1,037 per month, while the average unemployment check is $1,013 per month, the nonprofit advocacy group Families USA reported Friday.
Even the average individual policy under the federal Consolidated Omnibus Budget Reconciliation Act cost $371 per month in Florida, out of reach for a jobless person trying to pay rent and buy food, said Families USA Executive Director Ron Pollack.
"COBRA health coverage is great in theory and lousy in reality," Pollack said.
Nationally, the cost of a family COBRA policy eats up 84 percent of the average jobless check.
Like other health care advocates, the group called on Congress to include several billion dollars in its economic stimulus package to subsidize COBRA payments for jobless workers and to help states expand Medicaid programs to cover those uninsured because of layoffs.
Both initiatives are considered likely to pass.
That would be great news to Fort Lauderdale widow Joanne Naujeck, 60, who said she can barely afford $300 per month for COBRA and has no good options for coverage when it expires Feb. 1.
"Health insurance, ever since my husband died, has been like a knife in my back," said Naujeck, an idle hotel employee.
COBRA, started in 1986, requires job-based insurance to offer continued coverage for 18 months to employees who lose their jobs. But the employee must pay the entire cost plus a 2 percent fee.
The cost increase can be huge for the employee because employers normally pay three-fourths of the cost.
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