See the full report (pdf) | Download Acrobat Reader
Washington, D.C. - As Congressional leaders and the White House negotiate over the economic stimulus package, a new report was released today indicating that more than 725,000 workers laid-off since the recession began in March 2001 lost health insurance coverage. Almost 345,000 of these laid-off workers lost health coverage in September and October, as the number of unemployed and uninsured climbed in the wake of the September terrorist attacks.
The report, issued by the consumer health organization Families USA, may have a bearing on whether Congressional and White House negotiators include health coverage protections for recently laid-off workers. The Senate Finance Committee adopted, and Congressional Democrats support, a stimulus package that includes major, new subsidies so that laid-off workers can afford COBRA health coverage, as well as additional federal funding for state Medicaid programs. Congressional Republicans and the White House oppose those measures.
Families USA emphasized that the 725,000 laid-off workers who lost health coverage since March does not include the dependents of laid-off workers who also lost health coverage. Those numbers are incalculable from current data sources, according to the report. As a result, Families USA indicated that the large numbers cited in the report understate the even larger number of people who became uninsured.
"Due to the recession, America's workers and their families are experiencing a fast-growing epidemic of health coverage losses," said Ron Pollack, executive director of Families USA. "This epidemic is undoubtedly causing havoc to the families most hurt by the recession."
Under the federal COBRA law, laid-off workers and their families can continue health coverage for 18 months through their past companies if those companies have 20 or more employees. The Families USA report indicates that 38 states have supplemented federal law by establishing COBRA-like health coverage for workers who were laid off from smaller firms.
A recent study, cited in the Families USA report, shows that only one out of five people eligible for COBRA health coverage actually receive it because they can't afford to pay for it. The national average cost of employer-provided family coverage plus a two percent fee is $7,194 per year, or $600 per month.
"COBRA health coverage is a potential lifeline for laid-off workers," said Pollack. "But, for most families, that lifeline is out of reach because it is unaffordable. A significant COBRA subsidy could change that and provide real protection for America's workers and their families."
According to the Bureau of Labor Statistics in the U.S. Department of Labor, the number of unemployed rose from 6,088,000 in March 2001 to 7,741,000 in October 2001. Approximately 784,000 of this 1.65 million increase in the number of unemployed Americans occurred in September and October.
The Families USA report is based on the Bureau of Labor Statistics' monthly unemployment reports as well as a study prepared by the U.S. Census Bureau concerning the proportion of laid-off workers who become uninsured.
