Jobless Alabamians hit hard by COBRA subsidy cease
By: Health Insurance
Submitted: 2009-12-10 13:30:40 | Word Count: 353
Unemployed Alabamians relying on COBRA health insurance will be second only to Mississippi in the hit they experience from expiring federal premium subsidies, according to a report released Tuesday.
In Alabama, the average monthly COBRA premium is $1,005. The state’s average monthly unemployment insurance checks are $903. The subsidies, which were started in March by the American Recovery and Reinvestment Act, were made available for only nine months. Millions of unemployed American workers relied on the subsidies to pay COBRA premiums to continue health coverage from their previous employer, according to health care advocate Families USA.
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The federal subsidies, which paid 65 percent of the cost of COBRA premiums, began expiring Dec. 1. American Families’ report found Alabama and Mississippi ($839) had the lowest average unemployment benefits with Washington ($1,826) and Hawaii ($1,808) having the highest. In Mississippi the average monthly unsubsidized family COBRA premium is 22.4 percent higher than the average monthly unemployment insurance benefit check.
Alabama was joined by Florida ($1,147 vs. $1,010), Louisiana ($1,013 vs. $968), South Carolina ($1,090 vs. $1,061) and Tennessee ($1,112 vs. $975) among states whose unemployment benefits were less than COBRA costs.
For subsidy recipients whose federal benefits began after March, the expiration will be nine months after their start-up date.
The Congressional Budget Office and Joint Tax Committee estimated that approximately 7 million adults and dependent children would receive the COBRA subsidy in 2009. Without subsidies, the report finds, nationwide COBRA premiums for family health coverage will cost laid-off workers on average $1,111 per month – 83.4 percent of the average ($1,333) monthly unemployment insurance checks they receive.
The data for the Families USA report were derived from federal sources in the Departments of Labor and Health and Human Services.
