Boost to health coverage planned
State seeks to assist ranks of unemployed
Massachusetts will combine federal stimulus money with an existing state assistance program so that thousands of unemployed residents will be able to get health insurance at a small fraction of the usual cost, state officials are expected to announce today.
A program called COBRA has long allowed people to keep their employer-provided health coverage when they lose their jobs, but without the employer picking up part of the tab, many workers were unable to pay the premiums. To make insurance more affordable for the unemployed, the federal stimulus package signed into law last month pays nearly two-thirds of the cost of health insurance for nine months.
Massachusetts already has its own program to help cover COBRA costs for low- and some middle-income unemployed people. Now Massachusetts will combine its program with the federal initiative, using state money to offset the remaining one-third of a family's premium costs not covered by the federal benefit.
The net effect is that the COBRA benefits will be stretched farther. Payments for families earning no more than $84,000 will be as low as $70 a month for family insurance plans that begin at $1,000.
With the move, Massachusetts continues as one of the most generous states in providing health insurance assistance to laid-off workers. "We think this is going to be a tremendous benefit to unemployed folks who had a health plan subject to COBRA," said Suzanne M. Bump, state secretary of Labor and Workforce Development. "Even under the Medical Security Program there were a lot of folks who still couldn't exercise their COBRA options. This can really help bridge the gap."
The 20-year-old Medical Security Program - funded by a tax on employers - is a separate program that helps unemployed people whose income does not exceed $84,000, or 400 percent of the federal poverty limit of $21,000 for a family of four. As of January, 17,803 workers and family members get their health insurance this way, nearly double the number in January 2008.
Although some of those families had the option of continuing their workplace coverage through COBRA, they could not afford the upfront premiums of $1,000 or more and turned to the Medical Security Program for help. The new subsidy plan being announced today is expected to put healthcare under COBRA within reach, said Gerald A. McDonough, general counsel of the state labor department.
Families will be able to stay covered under their former workplace insurance plans by paying as little as $350 a month in advance, with $280 of that reimbursed later.
A spokesman for the Boston-based advocacy program Health Care For All applauded the newly combined efforts of the state and federal COBRA programs.
"We are really pleased with the decision to layer both the federal assistance with state assistance to provide maximal benefits to low-income people who are struggling to find jobs after being laid off," said research director Brian Rosman. "One thing we know is that when people lose their jobs, their medical needs don't go away."
He said his office has been inundated with calls from people losing their jobs who want to know more about the Medical Security Program and the new COBRA assistance. The state's 2006 law mandating near universal health insurance coverage imposes a penalty on people who go without insurance for more than three months.
The federal COBRA program is designed to avoid interruptions in coverage by allowing workers and their families to keep their health insurance after leaving an employer's plan for a variety of reasons, including an employee's job loss, death, or divorce. The subsidy created by the federal stimulus package covers people losing their jobs between Sept. 1, 2008, and before Dec. 31, 2009.
It comes with some income limitations: Benefits begin to decrease for individuals starting when their income hits $125,000 a year, and for couples when their income reaches $250,000. The benefits are not available for individuals with incomes over $145,000 and couples with income over $290,000.
The benefit is not retroactive, but it does reopen the 60-day window for selecting COBRA coverage. Employers will be required to send letters offering COBRA again to laid-off workers who may have declined it, dating back to September. People on COBRA will also be notified by their former employers.
Elizabeth Cooney can be reached at lizcooney@gmail.com 
