Some key facts about laid-off workers without health coverage

by Stan Dorn, Senior Policy Analyst

How widespread is unemployment?

·         8.1 million Americans were unemployed in March 2002. [1]

·         In March 2002, unemployment reached 5.7 percent, only slightly below its December 2001 peak of 5.8 percent. [2]

·         Unemployment has remained in the same range since last October. As the Acting Commissioner of the Bureau of Labor Statistics noted on April 5, “The rate has been within two-tenths of a percentage point of 5.6 percent in each of the last 6 months.” [3]

·         The Federal Reserve Board projects that, despite the apparent start of economic recovery, unemployment will be in the range of 6 to 6.25 percent by December 2002. [4]

How long does unemployment typically last?

·         In March 2002, the average duration of unemployment was 15.4 weeks. [5]

·         At the same time, many had been laid-off for longer periods, including 1.2 million unemployed for more than six months. [6] More than half a million had been unemployed for a year or more. [7]

What’s the relationship between unemployment and health coverage?

·         More than two in five (43%) unemployed adults are uninsured, along with 17% of their children. [8]

·         As the economy slowed in 2001, the number of uninsured Americans grew by an estimated 2 million. [9]

·         Less than one in three (29%) unemployed adults receives health coverage from the employer of a spouse or other family member. [10]

·         Among unemployed Americans with low incomes (i.e., at or below 200 percent of the federal poverty level, now $1,477 a month for individuals, $3,017 for a family of four, etc.), only 3% buy coverage at full cost from their former employers through COBRA. Among those with higher incomes, 10% purchase such coverage. [11]

·         Among employed Americans with low incomes, 40 percent would qualify for COBRA if laid-off. At higher income levels, 75 percent would qualify. [12]

Are short periods without health insurance harmful?

·         One recent survey [13] found that many of the short-term uninsured (typically uninsured for 6 months or less) go without some necessary health care. For example:

o        35% do not fill prescriptions because of cost.

o        27% skip recommended medical tests or treatment.

·         The survey also discovered that many suffer financial harm. For example:

o        37% hear from collection agencies about unpaid medical bills.

o        39% skip payments for basic living costs, such as food, rent, heating, or electric bills.

·         Under federal law, a worker or family member uncovered for just 63 days can later be denied coverage of pre-existing conditions for 12 to 18 months after health coverage restarts.

Can many unemployed afford to buy health coverage on their own?

·         Nearly two out of three (64%) unemployed, uninsured adults have incomes at or below 200% of the federal poverty level. [14]

·         Among recently unemployed workers with prior employer coverage, 41 percent receive no unemployment insurance (UI) payments. ^[15]  

·         Monthly UI payments now average $1,100. ^[16]

·         In 2001, the average monthly premiums for employer-based insurance were $221 for single coverage and $588 for family coverage, [17] or 20% and 53%, respectively, of average UI payments.

·         For nearly two in five (38%) laid-off workers, the combination of UI payments and a sale of all their liquid assets would cover less than 25% of income lost through unemployment. [18]

For more information, contact Stan Dorn at 202.833.8877, ext. 14, or sdorn@esresearch.org.

Notes