The loss of COBRA subsidies means thousands of laid-off Californians subsisting on unemployment checks will have to use most of that income to pay for health coverage, if they choose to keep it.
The first recipients of the federal subsidy began losing the aid on Tuesday and are now on their own to make their full health insurance payments, 65 percent of which were being paid for by the federal government.
"For those people who lose their subsidy, the overwhelming majority of them will become uninsured," predicted Ron Pollack, executive director of Families USA, a health care advocacy group that is pushing Congress to extend the program. "We're going to see a real spike in the number of people uninsured."
In California, the average COBRA premium is $1,107 a month, but the average monthly unemployment check is $1,349 — leaving the typical unemployed Californian little left to spend on life's other expenses, according to a new study released Tuesday by Families USA.
Nationally, the average unemployed American would have to spend 83.4 percent of his or her monthly unemployment check to afford COBRA premiums without a subsidy, the study found.
As many as 7 million Americans are expected to take advantage of $25 billion in federal subsidies approved in February, allowing the unemployed to better afford continued health coverage through their former employers under the Consolidated Omnibus Budget Reconciliation Act, better known as COBRA.
With the subsidy, the average monthly cost for COBRA benefits is $388.
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