Mach Analyst in
Health Care Financing
Janemarie Mulvey Specialist in Health Care Financing
workers lose their jobs, they can also lose their health insurance. If that
health insurance is family coverage, then a worker’s family members
can also become uninsured. For individuals who do not typically use many
health care services, loss of insurance might have little impact. However,
for individuals who have health problems or who are injured, loss of coverage
can be serious. Without insurance, individuals often have difficulty
obtaining needed care and problems paying for the care they receive.
Unemployed individuals and their family members who cannot postpone care
may incur large bills that create or add to financial distress. With the
Congressional Budget Office expecting the unemployment rate to remain
above 8.0% through 2014, retaining or obtaining health insurance may
continue to be difficult for the unemployed and their family members.
The 111th Congress passed legislation that temporarily addressed part of this
problem through a temporary premium subsidy for health insurance coverage
through Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985 (COBRA, P.L. 99-272). COBRA generally requires certain employers to
provide employees and their families the right to continue participation in the
employer’s health plan in the case of certain events, including involuntary
dismissal. To continue coverage, workers must pay both the employee’s and
the employer’s share of the premium, plus a 2% administrative fee. The
premium subsidy that reduced the cost of COBRA coverage for certain
individuals who lost their jobs expired on May 31, 2010.
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended)
is intended to expand access to health insurance coverage. Some ACA provisions
made immediate market reforms to increase consumer access to health
insurance, particularly for young adults, individuals with preexisting
conditions, and other, higher-risk groups. For example, one provision of the
ACA generally allowed dependents up to age 26 to remain eligible for
insurance coverage through their parents’ plans, which could help the
younger unemployed. Some other provisions of the ACA that increase access
to coverage do not become effective until 2014, however. Those provisions include
expansion of Medicaid to those with modified adjusted gross income (MAGI) up to
133% of the federal poverty level (FPL) and insurance premium credits and
subsidies for individuals and families with MAGI below 400% FPL.
Currently, certain individuals cannot benefit from the expanded access to
coverage under the ACA because either the provisions do not apply to them
or because applicable provisions have not yet taken effect. These
individuals could include unemployed individuals and their family members.
This report examines access to health insurance coverage among the unemployed population
and provides information and analysis to inform the congressional debate on
this issue. The report is divided into five parts: (1) analysis showing
the diversity of the unemployed population, (2) analysis showing the
relationship between unemployment and loss of employersponsored health
insurance, (3) analysis of certain unemployed individuals at-risk for being uninsured,
(4) summaries of current federal programs and tax treatments that can help some unemployed
individuals (and their families) obtain or retain health insurance, and (5)
additional options that might be considered, including extending the COBRA
eligibility period and allowing unemployed individuals under age 65 to
“buy-in” to Medicare—that is, to pay premiums to join Medicare before they
reach age 65.
Document available via e-mail as a pdf file or in paper form.
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