By SCOTT WHIPPLE
Herald Press staff

A report issued on the same day the government released its latest unemployment data shows most laid-off people are likely to lose their health coverage.

The average national premium costs for family COBRA coverage consume almost 84 percent of average unemployment benefits. COBRA — Consolidated Omnibus Reconciliation Act — gives workers and their families the right to continue health benefits following job loss by paying the full cost of insurance.

According to the Labor Department, the unemployment rate rose to 7.2 percent last month. The U.S. lost 524,000 jobs in December, bringing 2008’s total job loss to 2.6 million.

The report, issued by the consumer health organization Families USA, focuses on the unaffordability of COBRA coverage.

The average Unemployment Insurance benefits vary substantially from state to state, as do the average COBRA premium costs. According to the report:

n On average nationally, unemployment monthly benefits are $1,278 while COBRA monthly premiums for family coverage are $1,069. 

n In 41 states COBRA family coverage premiums, on average, consume more than three-fourths of average unemployment benefits. Connecticut is 80 percent.

n In nine of those states the average COBRA premiums equal or exceed average unemployment benefits.

“COBRA health coverage is a great concept but lousy in reality,” said Phil Sherwood, deputy director of the Connecticut Citizen Action Group. “For the vast majority of workers laid off in Connecticut, they and their families are likely to join the ranks of the uninsured. There needs to be a safety net.”

Sherwood called it “egregious that we have a health care system that if you get laid off you lose your health care. A better system would be one that’s portable, that moves with you from job to job, so when there’s an economic downturn Americans aren’t left unable to afford protection.”

According to Sherwood, the current situation forces Americans to visit emergency rooms and in the end, taxpayers end up paying more.

“It’s a broken system,” he said. “We can’t afford not to protect families. Preventative health care saves money in the long run.”

“The right to COBRA health coverage is a tragic ruse for millions of families whose breadwinner was laid off,” said Ron Pollack, Families USA’s Executive Director. “Unemployed workers need either premium subsidies to help them afford COBRA benefits or temporary health safety-net coverage through Medicaid.”

As the unemployment rate hit a 15-year high Friday, three of Connecticut’s elected officials said they had a game plan for recovery.

U.S. Rep. John B. Larson, D-Ist District, chairman of the House Democratic Caucus, said the unemployment numbers are “the harshest evidence, so far, of the severity of our economic crisis... Addressing the crisis of the unemployed is the top priority of our economic recovery plan. We will provide short-term help and long-term solutions to this problem. First, we will help those most impacted by the economic downturn by extending unemployment insurance and access to health care. We cannot allow our fellow Americans to suffer while their jobs are slashed and wages cut.”

The congressman added that any recovery and reinvestment plan must also be focused on creating jobs.

“Historic times call for historic measures,” said U.S. Rep. Chris Murphy, D-5th District. “In the coming weeks, we’ll be putting together an aggressive and comprehensive economic stimulus bill that creates jobs and protects what remains in our retirement accounts.”

Murphy will tour the New Britain CTWorks One-Stop workforce training facility Monday. “I am fighting every step of the way to make sure the bill gets as much assistance to Connecticut as possible.”

Sen. Chris Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, noted that this is the 12th-straight month of decline:

“These latest employment numbers confirm the struggle many families nationwide and in Connecticut are already experiencing. Unfortunately, the prospect of job loss will continue to loom large for families trying to make ends meet, with the jobless rate predicted to continue to rise in coming months.”

The report’s data about unemployment benefits was obtained from the U.S. Department of Labor in weekly increments. Families USA multiplied these by the standard 4.3 conversion factor to arrive at monthly payments. The COBRA premium costs are based on an update of the Medical Expenditure Panel Survey developed by the Agency for Healthcare Research and Quality in the U.S. Department of Health and Human Services.