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Thursday, January 27, 2011

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.

Although the 111
th Congress had passed legislation that temporarily addressed this problem through a temporary COBRA premium subsidy for health insurance coverage for certain unemployed workers, these provisions expired May 31, 2010. The new health care reform law, the Patient Protection and Affordable Care Act (PPACA; P.L. 111-148), will provide some immediate reforms to the health insurance market. These provisions are intended to increase consumer access to health insurance, especially for persons with pre-existing conditions and for other higher-risk groups. These immediate reforms may also help the unemployed under the age of 27 through the expansion of dependent coverage to this age group. PPACA, however, does not include any premium subsidies prior to 2014.

In the longer-term, by 2014, enactment of PPACA 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. Because most of these provisions will not be implemented until 2014, this results in an interim period between enactment of the legislation and the date it becomes operational when unemployed people will need assistance in obtaining health insurance coverage.

This report is divided into four parts: (1) analysis showing the diversity of the unemployed population, (2) analysis showing the relationship between unemployment and loss of employersponsored health insurance, (3) summaries of current federal programs and provisions that can help some unemployed obtain or retain health insurance, and (4) additional options that might be considered, including extending the COBRA eligibility period and a Medicare Buy-in.

Date of Report: January 11, 2011
Number of Pages: 19
Order Number: R40165
Price: $29.95

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