Health care subsidy about to dry up

A federal health insurance lifeline for the unemployed is being reeled back in, tripling the cost of health insurance for some unemployed people.

That’s according to Families USA, a national advocacy organization for health care consumers, which released a report Tuesday about the end of a stimulus subsidy that temporarily cut health insurance costs for the unemployed.

The subsidy, which was to help an estimated 7 million adults and children nationwide, is tied to COBRA, a federal program that lets people keep their health insurance plans through their former employer, as long as they pay the entire premium plus a 2 percent administrative charge. Even this rate is much less expensive than buying health insurance individually.

Earlier this year, the American Recovery and Reinvestment Act included a $25 billion provision that covered 65 percent of people’s COBRA costs. In New Hampshire, it dropped an average monthly COBRA bill from $1,228 to $430.

But the law was designed to expire after nine months, so those who signed up in March are now out of luck, said Ron Pollack, executive director of Families USA.

“The real impact is going to be on lost lives and health that is put in jeopardy,” Pollack said via conference call. “And for those people who do get timely care, it’s going to mean they’re going to go into substantial debt, and many of them will have to declare bankruptcy.”

People who lose the subsidy also may delay seeking medical care or wait until a condition is so bad they require emergency treatment, said Lisabritt Solsky, deputy Medicaid director at the state’s Department of Health and Human Services.

It could also force people to seek assistance from their community welfare officer for prescriptions, or to even take half a dose of their prescribed medications.

It is unclear exactly how many New Hampshire residents are enrolled in COBRA or who have received the subsidy for themselves and their families, although the number is presumably less than 50,000 the estimated number of unemployed adults in the state as of October.

The New Hampshire Department of Insurance doesn’t ask insurance carriers to distinguish between employees on regular insurance and those on COBRA, said Michael Wilkey, director of the life, accident and health division.

Pollack said his organization doesn’t provide a state-by-state breakdown for COBRA enrollees, adding that the federal treasury department is reportedly compiling the information.

Even so, Pollack said, “We believe that this will affect several million people right away, and will continue to affect additional people as months go by.”

Pollack said COBRA costs eat up 83 percent of the average unemployment insurance check.

In New Hampshire, it’s estimated to be even more. According to Families USA, the average monthly unemployment insurance check here is $1,283, which means an average monthly COBRA payment consumes 95 percent of that check.

Solsky said there was no way to determine if the subsidy expiration would hike the number of enrollments in Medicaid or the New Hampshire Healthy Kids program. That’s because not everyone who is unemployed has COBRA, and not everyone who has COBRA will lose the subsidy immediately, and not all those who lose the subsidy will forfeit COBRA all together, she said.

“We look at broader economic indicators to project where our case loads are going,” Solsky said. “Right now, nothing has suggested we’ll see a leveling off or decrease. … This might be one of those signs, but that’s baked into a much richer bread that has a lot of other data points and indicators in it.”

Legislation was introduced in the U.S. Senate last week to extend the COBRA subsidy for another six months, Pollack said, this time with 75 percent coverage of premiums.

But, he said, the real solution would be total health care reform.

Karen Lovett can be reached at 594-6402 or klovett@nashuatelegraph.com.