Employers who offer health insurance coverage could see a 9% cost increase next year, and their workers may face an even bigger hit, according to a report Thursday from consulting firm PricewaterhouseCoopers.

Costs will rise in part because workers worried about losing their jobs are using their health care more while they still have it, the firm said in the report released to the Associated Press. The report also said rising unemployment is driving up medical costs.

Health care reform legislation currently being hashed out in Congress likely will have little impact on next year’s costs, said PWC Principal Michael Thompson. But he noted that the intense focus on health care may slow price increases.

Continue reading…

Because few people can afford that, the authors say, the result is a growing number of people being hit with the double whammy of no job and no health coverage.

In 1985, Congress passed legislation enabling newly unemployed Americans to extend their employer-based health insurance for up to 18 months. But under the program, known as COBRA, the individual must pay 102 percent of the policy’s full cost.

“COBRA health coverage is great in theory and lousy in reality,” said Ron Pollack, whose liberal advocacy group, Families USA, published the analysis. “For the vast majority of workers who are laid off, they and their families are likely to join the ranks of the uninsured.”

A health insurance policy for the typical single person consumes 30 percent of the average unemployment benefit, the survey found. In the District, Maryland and Virginia, the price of a standard COBRA family plan is three-fourths of the average unemployment check.

News yesterday that the unemployment rate jumped to 7.2 percent adds urgency to the problem, Pollack said, because employment and health insurance are often intertwined.

For every 1 percentage point rise in unemployment, the number of uninsured Americans climbs by 1.1 percent, according to an analysis last spring by the Kaiser Family Foundation, an independent research group.

Pollack and House Speaker Nancy Pelosi (D-Calif.) said the new report highlights the need to include health insurance subsidies in the economic recovery package being crafted this month.

“Without that,” Pelosi spokesman Brendan Daly said, “they simply cannot afford to pay for temporary continuation of their health insurance.”

But Nina Owcharenko, a health policy analyst at the conservative Heritage Foundation, said it would be wiser to offer unemployed Americans a broad range of health insurance options, including high-deductible private policies or new state-based programs.

Given how expensive COBRA is, she said, alternatives would “save the individual money and save taxpayer money.”

This article is by Ceci Connolly for the Washington Post.