Temporarily Unemployed

After relatively low unemployment for all of 2002, the unemployment rate in Rhode Island has consistently been above 5% in 2003, and above 6 percent for some months. As policymakers consider how to help newly unemployed workers and reinvigorate the overall economy, it is important that policies be put in place to ensure that workers do not lose their health insurance as well as their jobs.

Fact:  Each one percent increase in unemployment increases the number of Americans who lack health insurance by about 1.2 million.¹

Fact:  Job loss is the primary reason why adults become uninsured at some point during the year.²

Fact:  35 percent of laid-off workers are ineligible for COBRA because they work for a small firm, or were uninsured before they got laid off.³

Fact:  Only 20 percent to 25 percent of unemployed workers eligible for COBRA coverage can afford to purchase this coverage.⁴

What can we do about it?

Extend COBRA coverage to people who worked for small businesses

Right now people who lose their job from a company that employed less than 25 people can not purchase COBRA benefits. Some states have expanded COBRA coverage to make it available to people who worked for small employers.

Expand public programs to help people afford COBRA or get coverage while unemployed

States can use federal matching funds to provide time-limited Medicaid/CHIP coverage to low-income people receiving unemployment benefits. Medicaid/CHIP would subsidize coverage through COBRA when available, and participants would pay a premium based on their income.