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Originally published: 2011-09-06 09:31:40
Last modified: 2011-09-06 09:40:52

Jobless lose help paying COBRA

A federal program that enabled people to keep their employer-provided insurance at a reduced rate after losing their jobs expired Wednesday after three extensions.

For a premium and a 2 percent administrative fee, people who lost their jobs could keep the employer-provided insurance for themselves and their dependents for up to 18 months through the Consolidated Omnibus Budget Reconciliation Act and have part of the cost subsidized. Now that the subsidy extension has expired, affected people will have to pay full price for insurance or lose coverage completely. That expiration comes as a federal labor department report revealed no new jobs were created in August, holding the nationwide unemployment rate at 9.1 percent.

North Carolina Health Access Coalition director Adam Searing called the expiration devastating to North Carolina families.

“The average cost of a family health-care policy is $1,100 a month,” he said. “With the subsidy, it makes it a little more affordable at $300 or $400 a month. There's not many people who can afford $1,100 a month for health coverage and there certainly aren't many unemployed people who can afford health coverage for $1,100 a month.” 

North Carolina Justice Center policy analyst Adam Linker said even if the unemployed could afford the increased cost, they're not guaranteed eligiblity.

“If you are an older worker, let's say in your fifties, it may mean you are essentially locked out of the health insurance system because you had employer sponsored coverage and then you had COBRA,” he said. “You could be denied health insurance.”

Many older workers, he said, particularly displaced manufacturing employees, have never had to find insurance on the open market before.

“Until 2014 when health reform kicks in, they get charged more for insurance, so finding a new policy on the open market is very difficult,” he said. “For these people, it can be devastating on their personal finances because, if something goes wrong, they will have trouble paying their hospital bills.”

Linker called it a community economic situation, not just about the affected individual.

“People not having health insurance affects everyone in the community,” he said. “It means people with insurance get charged more. It means people without insurance get their houses foreclosed on and go into medical debt.”

The COBRA subsidy program covered 65 percent of the monthly premiums for people laid off from jobs that provided health insurance. COBRA subsidies came out of the American Recovery and Reinvestment Act to assist people who had been laid off starting in September of 2008. 

Kerry Hall, spokesman for the North Carolina Department of Insurance said her office has not seen a spike in calls regarding COBRA since subsides expired.

“Our advice for folks who have questions or problems with COBRA is to contact Smart NC at (877)-855-0231 so that our specialists can work with these people to determine if there are other options available to them if they are not able to afford the increase in the premium,” she said. “We will work with these folks to determine if there are special enrollment opportunities or options available through Inclusive Health and provide them with information on how to pursue these options.”

When purchasing health insurance, individuals are subjected to an underwriting process and are rated on their health condition, she said.

“For some individuals, health insurance may be affordable, given their means and their health conditions,” she said. “For others who have limited means or health conditions, they may find it difficult to afford insurance. “

Currently, options are, both federal and through the state through Inclusive Health, available to individuals who have been denied coverage or have been offered a plan higher than the cost for Inclusive Health. Impacted individuals are asked to call Smart NC to discuss options. 

In 2008-2009, Watauga had 9,621 nonsenior uninsured residents according to the North Carolina Institute of Medicine. Of that total, 937 were described as age 18 and under. Watauga's uninsured rate was 24.2 percent, higher than the state rate of 19.7 percent. The latest figures from the North Carolina Employment Security Commission put Watauga at an 8 percent unemployment rate for July.

North Carolina Health Access is a subsidiary of the North Carolina Justice Center.