Unemployment and Health Insurance: Current Legislation and Issues

Janemarie Mulvey
Specialist in Aging and Income Security

When workers lose their job, they can also lose their health insurance. For people with good health and luck, loss of insurance might not matter very much because they would not use many health care services anyway. However, for people who have health problems or are injured, loss of coverage can be serious. Without insurance, people often have difficulty obtaining needed care and problems paying for the care they receive. Unemployed people who cannot postpone care may incur large bills that add to their financial distress. 

The 111th Congress had passed legislation that temporarily addressed this problem. For example, the American Recovery and Reinvestment Act of 2009 (ARRA; P.L. 111-5), as amended by P.L. 111-118, included two provisions that help some unemployed maintain or get coverage: a 65% COBRA premium subsidy (for 15 months of coverage) and an increase in the Health Coverage Tax Credit (HCTC). Most recently, the Continuing Extension Act of 2010 (P.L. 111-157) was enacted on April 15, 2010, and extended eligibility for the COBRA premium subsidy through May 31, 2010. 

Under current law, individuals who are involuntarily terminated on or after May 31, 2010, would not be eligible for the COBRA premium subsidy. Earlier versions of H.R. 4213, the American Jobs and Closing Tax Loopholes Act of 2010, passed by both the House and Senate included a provision to extend eligibility for the COBRA premium subsidy to individuals who lose their jobs on or before December 31, 2010. However, the most recent House version of H.R. 4213 passed on May 28, 2010, removed this provision. This bill is now going back to the Senate for consideration and possible amendments. 

In the longer-term, enactment of the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148) will enable unemployed individuals who meet certain income criteria to obtain subsidized health insurance coverage. These include expansion of Medicaid to families with incomes under 133% of the federal poverty level and premium credits and subsidies for families with income below 400% of the federal poverty level. However, beyond immediate reforms to the health insurance market, many of the provisions in PPACA will not be implemented until 2014. 

This 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 employer sponsored health insurance, (3) Summaries of current federal programs and provisions that can help some unemployed obtain or retain health insurance, (4) Summaries of legislation introduced in the 111th Congress, and (5) Additional options that might be considered.


Date of Report: June 3, 2010
Number of Pages: 20
Order Number: R40165
Price: $29.95

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