Job losses jeopardize health coverage

McClatchy Newspapers (MCT) - Nettie Shafer has a house, a car and about $1,000 left in savings. But the 59-year-old divorced bank teller risks losing all if she doesn't find a job with health insurance soon.

Shafer, who lives in Raleigh, is on about a dozen medicines, seven of them to prevent a third heart attack.

Now, the insurance coverage she retained from her former job at Wachovia has run out _ and the backup she has available covers only a fraction of her medical costs.

"I'm still looking for a job, every day," Shafer said. "Something's around the corner. I truly believe that.

"A survival job is all I need," she said.

The recession has not only cost thousands of people their jobs, it has also cost them affordable health insurance.

People who had employer-sponsored health insurance are, when laid off, usually eligible for up to 18 months of continued coverage under COBRA, the federal law more formally known as the Consolidated Omnibus Budget Reconciliation Act.

But COBRA is expensive.

Unemployed workers must pay the total premium. The monthly average is more than three times as expensive as what workers with employer-sponsored health insurance pay, according to data by the Kaiser Family Foundation and FamiliesUSA.

That can take a hefty chunk out of unemployment benefits. In North Carolina, the average COBRA premium for a family eats 82.4 percent of an unemployment check, according to data from FamiliesUSA, a consumer advocacy group. Many decide to take their chances and don't sign up for COBRA.

At the end of 2008, an estimated 175,000 North Carolinians were out of work and uninsured, according to the N.C. Institute of Medicine. Though this includes people who lacked insurance before they became unemployed, the estimate represents a 75 percent increase since the end of 2007.

The fourth quarter was particularly brutal in boosting the state's growing number of unemployed who are at risk of becoming uninsured, said John Quinterno of the N.C. Budget and Tax Center.

While the construction industry was among the first to shed jobs earlier in the year, many of these jobs never offered health insurance. When layoffs picked up later on, manufacturing as well as professional and business services were hit, Quinterno said.

"We're starting to see significant losses in industries that are more likely to provide health insurance," he said.

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Raymond Owens, 57, has been uninsured and unemployed since November. Owens, who is single, isn't eligible for COBRA and can't afford to buy insurance on his own. He doesn't get unemployment checks, because he quit his job as a technical aide at a Washington hospital to pursue a better job in Durham. That job didn't come through. Now, he's looking for other work and hoping he won't get sick.

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"I've been taking care of myself," Owens said while he was waiting in line to check on job leads at the unemployment office in Durham.

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Insurance that isn't temporary is available without a job. Those who are married can usually get coverage through a spouse who has employer-sponsored benefits. There also are individual policies, and the state has a new program that targets people with medical issues. But some of those options can be expensive.

For example, a 54-year-old healthy woman would pay at least $231.29 per month for an individual policy with Blue Cross Blue Shield of North Carolina, the insurer that has 75 percent of individual policies statewide. The BCBS estimate comes with several additional costs, including a $5,000 deductible and co-pays on doctor visits and prescriptions.

Another option for unemployed workers or their family members is Medicaid. Enrollment in the health insurance program for the poor has begun to rise after years of declines. The $787 billion stimulus package that President Barack Obama signed into law Feb. 17 provides states with $87 billion in additional funds for Medicaid.

The package also includes $24.7 billion in federal COBRA subsidies to help those who can afford to temporarily stay on their former employer's health insurance plan while they are looking for another job. The subsidies will pay 65 percent of the monthly payments for laid-off workers who are eligible.

For Kris Stanfield and her husband, Rob, the subsidy may make health insurance affordable once Stanfield's benefits run out in May.

Stanfield lost her job as communications director for the N.C. Technology Association. Fewer technology companies have been paying membership dues, which forced the Raleigh organization to cut costs. Her job provided insurance coverage for her and Rob, a self-employed commercial real estate broker.

She estimates the subsidy will reduce the monthly premium to continue health insurance for both of them under COBRA to about $260.

Seven months' pregnant with the couple's first child, Stanfield, 30, wouldn't think of going without insurance.

She is thankful NCTA's board agreed to extend her health-care benefits until the baby is born, but she worries about what happens after that.

"This couldn't have come at a worse time," she said.

For now, the Stanfields are focused on cutting expenses. Rob Stanfield has been looking for a part-time job in retail. But what they really need is a job with benefits.

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© 2009, The News & Observer (Raleigh, N.C.).