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Millions of jobless lose COBRA funds

BRADENTON — Tough times are getting tougher for many laid-off workers.

Millions of people out of work lost federal subsidies Tuesday that helped them afford COBRA health insurance coverage, adding to the more than 46 million Americans who are uninsured.

The COBRA subsidies that expired Tuesday affected the first recipients of the program that began in March. The federal program came out of the American Recovery and Reinvestment Act and pays 65 percent of a laid off worker’s COBRA premiums for nine months.

COBRA coverage is a temporary continuation of health coverage for former employees. It is usually more expensive than health coverage for active employees because unemployed workers pay the full premium costs plus a 2 percent administration fee.

Families USA, a non-profit group for health care consumers, estimates this first wave of expirations could affect about seven million adults and dependent children. The organization is unsure how many people it will affect in each state.

“We believe this will affect seven million people right away and will continue to affect additional people as the months go by,” said Ron Pollack, executive director of Families USA. “This has been a lifeline that has allowed people to retain their health care coverage and that lifeline is now being withdrawn.”

The average COBRA monthly premium is $1,111 for family coverage, and typically consumes 83.4 percent of the average unemployment check. In nine states, including Florida, the premium exceeds the average unemployment insurance check.

“That makes it so readily apparent why COBRA premiums are unaffordable,” Pollack said. As a result, Pollack said many become uninsured or seek Medicaid coverage.

The number of Medicaid recipients in Manatee and Sarasota counties has been steadily growing since last year. Manatee County had 34,037 Medicaid recipients through October, up from 27,536 in October 2008. In Sarasota County, there were 31,465 Medicaid recipients through October, up from 25,220 in October 2008.

“There has been quite an increase but not as much as the increase we have seen in cash assistance and food stamps,” said Erin Gillespie, spokeswoman for the Department of Children and Families. “That is mainly because Medicaid is so much more difficult to obtain.”

That is adding to a growing number of Americans without health insurance. The U.S. Census Bureau released a report in September that the number of uninsured Americans in 2008 increased to 46.3 million from 38.4 million in 2000.

As much as this number has grown, Ben Kunkel, director of operations at United Way 211 of Manasota, says the non-profit agency doesn’t get many inquiries for assistance obtaining health insurance.

“I’d say a good majority of the callers we get are in a situation that is almost beyond that, it’s almost more dire,” Kunkel said.

Kunkel said about 70 percent of its calls in October were for basic needs such as utilities, food, rent and mortgage. An estimated 5 percent were health care related.

“Many people are in the situation where they’re looking for the basic needs,” Kunkel said.

Pollack expects the number of uninsured Americans will only continue to grow as a result of the COBRA subsidies that have expired and anticipated future expirations.

“You can be assured the number of uninsured will spike upward,” Pollack said. “Undoubtedly, the overwhelming majority of (COBRA subsidy recipients) will become uninsured when the subsidy expires. They can’t pay 83 percent and still have a meaningful income for clothing and shelter and food and all the necessities of life.”

A bill before Congress aims to extend the COBRA subsidy. The bill titled “Extended COBRA Continuation Protection Act of 2009” would extend the subsidy for six months for those who are laid off between April 1 and Dec. 31.

Laid off workers now have until Dec. 31 to file for the COBRA subsidy and receive nine months of coverage.

U.S. Rep. Vern Buchanan, R-Sarasota, said he supports helping families and individuals keep their health care coverage and looks forward to reviewing the legislation should it come to the House for a vote.

Pollack said he hopes lawmakers will vote in favor of it should it go up for a vote.

“This is a benefit that has been very significant to families but it’s of limited duration,” Pollack said. “It is essential that legislation extend those subsidies.”