On March 16, the Commonwealth Fund released a report examining the 2007-2009 economic recession’s effect on health coverage.  Using data from the Commonwealth Biennial Health Insurance Survey, the report found that 57 percent of non-elderly adults became uninsured after losing a job that offered health coverage.  Only 25 percent of those who lost employer-sponsored coverage were able to obtain other coverage, with 14 percent continuing coverage through COBRA.  The report suggests that nearly all of the 52 million individuals who were without health coverage in 2010 will have coverage after the national health care reform law is fully implemented in 2014, most with subsidized premiums and reduced cost sharing.

From the report:

Using data from the Commonwealth Biennial Health Insurance Survey of 2010 and prior years, this report examines the effect of the recession on the health insurance coverage of adults between the ages of 19 and 64 and the implications for their finances and access to health care. The survey finds that in the last two years a majority (57%) of men and women who lost a job that had health benefits became uninsured. Both insured and uninsured Americans struggled to pay medical bills and faced cost-related barriers to getting needed care. When fully implemented in 2014, the Affordable Care Act will bring relief: nearly all of the 52 million working-age adults who were without health insurance for a time in 2010 will be covered, most with subsidized premiums and reduced cost-sharing. No one who is legally present will have to go without insurance when they lose their job, and no one will be charged a higher premium because of a health problem, have a problem excluded from coverage, or be denied coverage.

Full Report: How the Recession Has Left Millions of Workers Without Health Insurance (PDF | 905 KB) 

Commonwealth Fund. (2011). Help on the horizon: how the recession has left millions of workers without health insurance, and how health reform will bring relief-- findings from the Commonwealth Fund biennial health insurance survey of 2010. Collins, S. R., Dot, M., Robertson, R., and Garber, T.

The Employee Benefit Research Institute (EBRI) released an analysis in its October newsletter, suggesting the American Recovery and Reinvestment Act’s (ARRA) 65 percent COBRA subsidies helped fewer individuals than the federal government anticipated.  The analysis notes that, when Congress approved the ARRA, the Congressional Budget Office (CBO) estimated that ARRA COBRA subsidies would assist 7 million individuals at a cost of $14 billion. 

 

From the report:

This article examines trends in coverage through a former employer. There is conflicting evidence as to the effect of the subsidies on the take-up of COBRA coverage. This article examines that evidence and also reports the findings from recently released government data that can be used to track health insurance coverage from a former employer. It was found that by August 2009, the COBRA subsidies had had an impact on the percentage of nonworking adults with coverage through a former employer, but it was not as large as the initial estimate that ARRA would assist 7 million people with COBRA subsidies during 2009.

Full Report: The Impact of the COBRA Premium Subsidy on Coverage (PDF | 766 KB)   

Employee Benefit Research Institute. (2010). The impact of the COBRA premium subsidy on coverage. Fronstin, P.

On August 25, Aon Consulting released a survey, which found that 65 percent of employers plan to change their health plans to shift costs to their employees in 2011.  Employers reported plans to use numerous cost sharing techniques including, raising deductibles, copayments, coinsurance, and out-of-pocket limits.  For 2010, 24 percent of respondents said that their health care costs rose less than 5 percent, 33 percent reported that costs rose 5 to 10 percent, and 18 percent said that costs increased 10 to 15 percent.

From the report:

Aon Consulting surveyed 1,079 employers nationwide in its 2010 Benefits Survey, and found an increase in monthly COBRA* contributions for terminated employees. Specifically, the average monthly cost for employee-only HMO coverage for a terminated worker is $429 this year, compared to $399 for the same coverage in 2009. For employee plus family, the former employee is paying $1,251 a month this year, compared to $1,171 per month last year. As for PPO coverage, the average monthly cost for employee only is $449 in 2010, compared to $439 in 2009, and for employee plus family, the cost tops out at a monthly average of $1,310 this year, versus $1,275 last year. (See attachment for a detailed year-over-year comparison.)

News release: Unemployed See COBRA Costs Increase in 2010, While Current Workers Brace for More Health Care Cost Shifting in 2011, Says Aon Consulting 

Aon Consulting. (2010). Unemployed see COBRA costs increase in 2010 while current workers brace for more health care cost shifting in 2011.

 

A survey conducted by PricewaterhouseCoopers LLP (PWC) found that 41 percent of employers plan to increase cost-sharing for their employees’ health plans, including increasing deductibles and copayments.  The survey found that only 26 percent of employers plan to increase cost-sharing for prescription drugs, which PWC attributes to the increased use of generics.  In addition, the average reported increase in medical plan costs for 2010 was 7.6 percent, up from 7.4 percent in 2009.  PWC projects that employers’ medical costs will increase 9 percent in 2011, 0.5 percent less than the increase in medical costs that PWC projected for 2010.

From the report:

About the survey

• The survey was completed in the first quarter of 2010.
• The survey data contains detailed benefits information provided by approximately 700 participating companies in 30 different industries across the nation.
• The 2010 survey provides summary data on medical and prescription drug plan design, costs, COBRA rates, wellness and disease management programs, work-life programs, future healthcare strategies, and retirement benefits.
• Customized reports including benchmark results by company size, industry and location are available upon request.

Full report: PwC's 2010 Health and Well-Being Touchstone Survey (PDF | 300 KB)

PriceWaterhouseCoopers. (2010). Health and well-being touchstone survey: executive summary.

A study by the U.S. Treasury Department estimates that between one quarter and one third of unemployed Americans eligible for COBRA subsidies under the American Recovery and Reinvestment Act (ARRA) took advantage of the program.  The subsidy covers 65 percent of the cost of continuing a former employer’s health insurance plan for up to 15 months.  The study followed 6,000 unemployed New Jersey residents in the fall and winter of 2009.

From the report:

Overall, the results suggest that COBRA has been an important source of insurance coverage during the recession, especially for the middle class. Indeed, the availability of the program may have significantly slowed the growth of the uninsured population, which had been skyrocketing through February 2009. Figure 1 shows that a sudden flattening in the growth of the uninsured adult population began around the time that employers and employees received guidance on the

ARRA COBRA subsidy. The large participation in the COBRA program by unemployed middleclass workers could have been a major contributing factor to the relative stability in the share of Americans without health insurance since February 2009.

Full report: COBRA Insurance Coverage since the Recovery Act: Results from New Survey Data (PDF | 186.59 KB)

U.S. Treasury Department, Office of Economic Policy. (2010). COBRA insurance coverage since the Recovery Act: results from new survey data.

On April 16, KFF released an updated fact sheet on the impact of the Continuing Extension Act of 2010 (HR 4851) on health insurance for the unemployed.  

From the report:

In an effort to help people maintain coverage after a layoff, the stimulus bill officially known as the American Recovery and Reinvestment Act of 2009 (ARRA) provided a 65% subsidy to some of the unemployed to help them temporarily afford to keep their previous employer-sponsored coverage through the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). This program has since been extended and the latest extension will allow individuals who are laid off through the end of May 2010 to qualify for the subsidy. Without this subsidy, individuals maintaining their previous employer-sponsored coverage have to pay the full premium—both the employee and the employer share—plus a 2% administrative fee. The full cost of maintaining the average employer-sponsored coverage through COBRA is $1,137 per month for family coverage and $410 per month for individual coverage. Under the subsidy, the cost of maintaining the average policy is $398 per month for a family and $144 for an individual.

For the fact sheet:  The Extension of the COBRA Subsidy: An Update (PDF | 696.3 KB)

Kaiser Family Foundation. (2010). The Extension of the COBRA Subsidy: An Update.