Saturday, January 10, 2009

COBRA Costs More Than Benefits

This is hardly news for those of us who have faced unemployment while trying to maintain health insurance at times of our lives, but the recent report from Families USA shows just how widespread this problem is.

Nationwide, a COBRA policy eats up on average 84 percent of unemployment benefits in the United States. In nine states it costs more. In Florida for example, the average monthly unemployment benefit is $1,013 — while the average monthly COBRA premium for a family is $1,037.

COBRA, the federal act that requires employers to allow workers to maintain their health insurance policy at a group rate for a family, is not to blame here. But a serious overhaul of the insurance industry has long been needed. What to remember here is that these are group rates — which are usually at a substantial discount to what an individual can negotiate on her own.

News like this is sobering during our economic turmoil. And particularly worrisome as families will most assuredly not be able to keep up these onerous policies leaving many more children uninsured — and in a perilous position.

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