Paying for health care - major concern for unemployed
08 06 09 - 14:46
The price of health care
Paying for health care is a concern for many who are unemployed, and they are trying hard to find programs for which they qualify and can afford.
By Sarah Bruyn Jones - The Roanoke Times
Aid available to the newly unemployed to help lower the cost of health insurance isn't reaching everyone, leaving many without affordable access to medical care.
"I'd love to get it," Robert Blevins of Roanoke said about health insurance. "I've got three kids, they've got it. ... But I can't get it for me."
Blevins was laid off in April. He had the job, which did not come with benefits, through a temporary placement service. He's now collecting unemployment and working a part-time job that again does not include health insurance.
As part of the American Recovery and Reinvestment Act of 2009 -- President Obama's economic stimulus package -- the government set up a system to reduce the premium paid by recently laid off workers seeking to continue the health insurance they had when employed.
Virginia set up a similar program to help workers laid off from small businesses with 20 or fewer employees.
But insurance experts familiar with the new federal and state guidelines say it appears few people are using the programs and many others don't qualify.
"Unfortunately I don't think a lot of people are taking advantage of it, because they just don't know about it," said Bill Kite, who as president and owner of Roanoke-based D & S Life Agency, is involved with employee benefit packages for various companies in Roanoke.
Specifically, the federal stimulus bill lowered the amount a newly unemployed worker must pay to keep his or her former group health plan through COBRA from 102 percent to 35 percent of the premium. It applies only to workers who have been laid off.
Statistics from the government on whether more people are electing to take COBRA coverage are not yet available. With a similar government-sponsored health benefit designed for trade workers who have lost their jobs to overseas competition, about 15 percent of people take the coverage. Given that statistic, Lyn Hammond, Virginia's deputy secretary of commerce and trade, said she anticipates the COBRA subsidy will attract about the same percentage of recently laid-off workers.
"Most make the decision to forgo health insurance," she said. "Those who do decide to take it are folks who are sick or elderly or have pre-existing conditions."
Typically the Consolidated Omnibus Budget Reconciliation Act, better known as COBRA, allows workers who lose their health benefits the right to continue the group health benefits provided by their former plan for a limited time. This is permitted under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death and divorce.
Under the stimulus bill, eligible individuals pay 35 percent of the premium, with the remaining 65 percent being reimbursed to the employer through a federal tax credit.
While COBRA rules don't apply to companies with fewer than 20 full-time equivalents, Virginia has set up a system similar to the revised COBRA plan for people laid off from small companies, allowing the individual to pay 35 percent of the premium.
But those who lost jobs from companies that completely shut down, and those who had coverage from an individual policy instead of an employer-sponsored group policy don't qualify for the benefit.
So, as the unemployment rolls have swelled, so have the ranks of the uninsured.
Estimates indicate that as many as 14,000 people a day are joining the uninsured tally nationally, according to the Center for American Progress action fund. That's on top of the approximately 46 million who were uninsured before the recession.
The waiting room at the Bradley Free Clinic in Roanoke is increasingly occupied by people who are recently unemployed and have no other access to health care.
While traditionally Bradley provides medical care for the working poor, the nonprofit revised its eligibility requirements because of the recession to include people who recently lost a job.
Now, 50 percent of the people the clinic serves are recently unemployed, said Lorie McCollum, chief operating officer at Bradley. Of those who were recently laid off, McCollum said she didn't know how many had previously had health insurance through their employer. That makes it hard to gauge the number of people rejecting COBRA.
But it is obvious some are doing so because even at 35 percent of the premium, the price is often too steep.
That's what happened to Dawn Dungee, 28, when her husband, David, 33, lost his job in February. The Dungees were able to get their children health insurance through the state Medicaid program. And as a veteran, David Dungee qualifies for medical care at the Veterans Affairs Medical Center in Salem.
But that left Dawn Dungee without health insurance.
The Dungees had the option of taking COBRA and continuing on David Dungee's former policy, but the price tag even to cover only Dawn Dungee was too high. The costs were about $1,500 to continue the plan they had, or $425 for Dawn Dungee alone. The Dungees are unclear if that is the reduced price of 35 percent of the premium under the revised COBRA program, but even if it isn't, they couldn't afford even 35 percent of those figures, David Dungee said. They are already struggling to pay rent, a car payment and utilities on Dawn Dungee's monthly income of about $1,100.
"As far as health care goes, even if I wanted to participate in COBRA, there is no way I could find the money to afford it," David Dungee said. "And on top of the monthly payments there are co-pays, deductibles and other costs for health care. Insurance doesn't cover it all."
So his wife has turned to Bradley for her health needs.
Recognizing that 35 percent of a premium is a lot for the recently unemployed, the state is looking for federal grant funding to help cover the entire individual contribution for people with incomes up to 200 percent of the poverty line, Hammond said.
A new state program
The law governing the state program was enacted in April, and many are just beginning to understand it.
Like the federal COBRA changes, it's too early to determine how the state program is faring, but Kite said there is a learning curve for both employers and those who have lost their jobs.
"From the employers I have talked to, very few employees have actually done so," Kite said of those enrolling in the program. "It's so new, many just really don't understand it. ... I really think the employees just haven't really taken the time to sit down and understand it."
Anthem Blue Cross Blue Shield is also concerned that the message isn't reaching everyone who is eligible, said Owen Hunt, an Anthem lawyer who is working with his company on meeting the requirements of the law.
Because of that, Anthem is sending out notices to those who look like they might have lost their insurance coverage and may qualify for the program.
"We don't really want people straggling in in September," Hunt said. "If there are people out there who want to take advantage of it, we'd much rather get them in the system now, rather than pick them up later."
Unlike the federal program, the employer isn't responsible for paying the remaining 65 percent and then claiming a tax credit. Instead the insurance companies have to handle the 65 percent and later take the tax credit.
The law requires that those individuals who qualify must receive a letter explaining the benefit.
The insurance giant is also working on developing new individual plans to market to the unemployed who can't afford the more traditional plans.
When a company closes
Still there are those, including Henry Cundiff of Roanoke, who don't qualify for the COBRA or state program.
Despite that, Cundiff is trying not join the ranks of the uninsured.
Both Cundiff and his wife have diabetes and high cholesterol. His wife also has high blood pressure and glaucoma. He knows they need insurance to not only keep their medicine cabinet filled with the proper prescriptions but also to cover any doctor appointments or future ailments.
Cundiff, 64, lost his job on May 21, and his employer-sponsored insurance runs out at the end of the month.
He was one of the last of the 136 workers to be laid off from Fred Whitaker Co., a Southeast Roanoke textile plant that recently ceased operations. Cundiff has spent his entire career working in textile jobs and the last 13 years at Fred Whitaker. Each job came with health insurance.
"It was real good, too," he said of the insurance plans.
Now the Cundiffs are finding out just how hard it is to afford an individual policy on an unemployment check. He's even more concerned that he might not have found a job by the time his unemployment coverage runs out.
"I'm 64, who is going to hire me?" he asked. "Don't have a job, don't have insurance, I don't have nothing."
He does have "a little money" saved up, but that wasn't supposed to go to health insurance or covering out-of-pocket medical expenses. It was for retirement.
He has gotten quotes from several insurance companies. Anthem quoted him $589 a month, he said.
"I can't afford that," he said.
Right now he is leaning toward a catastrophic coverage plan that comes with a high deductible. He plans to try it for three months and use a drug store discount plan to pay for medications, but he knows it won't provide the safety net he had previously.
Cundiff turns 65 in October and will qualify for Medicare, but his wife is only 60 years old. He worries about her.
An emptier grocery cart
Even when people do sign up for revised COBRA coverage, it can have a significant impact on their wallets.
Mary Stanley, 55, of Pulaski elected to pay the $120 a month to keep her coverage after she was laid off in March from her production job. She is collecting $255 a week in unemployment, and the insurance premium is among her largest bills.
But health insurance was something she deemed necessary because at the time she was laid off, she had already scheduled an outpatient surgery in May to remove varicose veins. Her doctor told her without the surgery she risked having a vein burst and further health complications, she said.
Before the cost of her COBRA coverage was revised, Stanley was told she would have to pay $344 a month. She said she wouldn't have been able to afford that amount.
While she said she is grateful the cost was reduced, she is still having to make significant cuts to her weekly and monthly budget.
"I cut way back on groceries," she said. "I don't buy bread or milk and I'm eating a lot of chicken noodle soup, just whatever I can get for cheap. And I don't buy more than I have to."
With a house payment and utility bills, Stanley said her plan is to take it one day at a time and apply for a lot of jobs. But she is worried about what will happen if she still hasn't found a new job once her nine-month COBRA eligibility has ended. Like Cundiff, Stanley is worried she is too old to get another factory job. She thinks she might have to move to find work.