	Introduction

One consequence of unemployment is that individuals and their family members can lose their health insurance. Loss of insurance may have little impact on individuals who do not use many health care services. However, for those who have health problems or who are injured, loss of coverage can be serious. Without insurance, individuals often have difficulty obtaining needed care and have problems paying for the care they receive. Unemployed individuals and their family members who cannot postpone care may incur large bills that create or add to financial distress. Some of the unemployed and/or their family members will be eligible for Medicaid coverage. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) is intended to improve access to health insurance coverage, but it does not necessarily provide immediate access to coverage for unemployed individuals and their family members. Some provisions of the ACA that improve access to care have been implemented, but they apply to specific populations (e.g., individuals with preexisting conditions). The Congressional Budget Office (CBO) expects the unemployment rate to remain above 8.0% through 2014, indicating that the impact of unemployment on health insurance is likely to continue for some time to come. This report contains information and analysis intended to inform congressional debate over whether to address these issues, and if so, how, and to what extent. It is divided into five parts:
1. analysis showing the diversity of the unemployed population; 2. analysis showing the relationship between unemployment and loss of employer-sponsored health insurance; 3. analysis of certain unemployed individuals at risk for being uninsured; 4. summaries of current federal programs and tax treatments that can help some unemployed individuals obtain or retain health insurance; and 5. additional options that might be considered. COBRA Health Coverage Tax Credit Medicaid Itemized Deduction for Medical Expenses Health Savings Accounts

		COBRA

Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, P.L. 99-272 ) generally requires employers with 20 or more workers to provide employees and their families the right to continue participation in the company's group health plan in case of certain events, one of which is involuntary dismissal. One limitation of COBRA for the unemployed has been that covered individuals usually have to pay 102% of the health plan's full premium (i.e., both the employee's and the employer's share, plus a 2% administrative fee). Several provisions of the ACA are intended to increase consumer access to health insurance. An ACA provision that is helping certain unemployed individuals under age 26 obtain or retain health insurance is the expansion of dependent coverage. Beyond the immediate reforms to the health insurance market, beginning in 2014 the ACA will also provide premium tax credits and cost-sharing subsidies for certain eligible individuals who obtain coverage through a health insurance exchange, which could include some unemployed individuals. In addition, in 2014, or sooner at state option, the ACA will expand Medicaid access to certain individuals who are under age 65 with modified adjusted gross income (MAGI) up to 133% of the federal poverty level ($30,657 for a family of four in 2012). The COBRA premium subsidy was not available for those who lost their jobs after May 31, 2010. Individuals are generally not eligible for Medicare until age 65.
When workers lose their jobs, they can also lose their health insurance. If that health insurance is family coverage, then a worker's family members can also become uninsured. For individuals who do not typically use many health care services, loss of insurance might have little impact. However, for individuals who have health problems or who are injured, loss of coverage can be serious. Without insurance, individuals often have difficulty obtaining needed care and problems paying for the care they receive. Unemployed individuals and their family members who cannot postpone care may incur large bills that create or add to financial distress. With the Congressional Budget Office expecting the unemployment rate to remain above 8.0% through 2014, retaining or obtaining health insurance may continue to be difficult for the unemployed and their family members.
The 111th Congress passed legislation that temporarily addressed part of this problem through a temporary premium subsidy for health insurance coverage through Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, P.L. 99-272). COBRA generally requires certain employers to provide employees and their families the right to continue participation in the employer's health plan in the case of certain events, including involuntary dismissal. To continue coverage, workers must pay both the employee's and the employer's share of the premium, plus a 2% administrative fee. The premium subsidy that reduced the cost of COBRA coverage for certain individuals who lost their jobs expired on May 31, 2010.
The Patient Protection and Affordable Care Act (ACA, P.L. 111-148 as amended) is intended to expand access to health insurance coverage. Some ACA provisions made immediate market reforms to increase consumer access to health insurance, particularly for young adults, individuals with preexisting conditions, and other, higher-risk groups. For example, one provision of the ACA generally allowed dependents up to age 26 to remain eligible for insurance coverage through their parents' plans, which could help the younger unemployed. Some other provisions of the ACA that increase access to coverage do not become effective until 2014, however. Those provisions include expansion of Medicaid to those with modified adjusted gross income (MAGI) up to 133% of the federal poverty level (FPL) and insurance premium credits and subsidies for individuals and families with MAGI below 400% FPL.
Currently, certain individuals cannot benefit from the expanded access to coverage under the ACA because either the provisions do not apply to them or because applicable provisions have not yet taken effect. These individuals could include unemployed individuals and their family members. This report examines access to health insurance coverage among the unemployed population and provides information and analysis to inform the congressional debate on this issue. The report is divided into five parts: (1) analysis showing the diversity of the unemployed population, (2) analysis showing the relationship between unemployment and loss of employer-sponsored health insurance, (3) analysis of certain unemployed individuals at-risk for being uninsured, (4) summaries of current federal programs and tax treatments that can help some unemployed individuals (and their families) obtain or retain health insurance, and (5) additional options that might be considered, including extending the COBRA eligibility period and allowing unemployed individuals under age 65 to "buy-in" to Medicare—that is, to pay premiums to join Medicare before they reach age 65.