Health Insurance for Laid Off Workers in WA State

Problem: The existing options to help laid-off workers in Washington keep their health insurance are  inadequate, and leave most working families vulnerable to slipping into poverty. Workers’ loss  of health coverage will also exacerbate the state’s current economic downturn by dampening  consumer confidence, overloading already strained state-funded health programs, and  creating higher future health care costs.

Solution: The Basic Health Plan provides a solid, affordable package of benefits to working families in  our state. We could allow laid off Washington workers to access the Basic Health Plan.

Current Options Available to Laid-off Workers are Inadequate

Currently, laid-off workers in Washington have the following options for health insurance: COBRA,  individual private insurance, Basic Health Plan (BHP) and Medicaid. These programs each have serious  limitations that put them out of reach for most working families.

COBRA

  • COBRA allows workers who change or lose their jobs to maintain their health coverage by paying  102% of the premium. COBRA coverage is available for up to 18 months.
  • COBRA is not available to those who work for companies with fewer than 20 employees, federal  employees, and those who are laid-off because their employer goes out of business.
  • The eligibility rules strongly favor high income families – 67% of high income families are eligible,  versus only 32% of low income families.
  • COBRA coverage can eat up a significant part of the budget for a laid-off worker since he or she  becomes responsible for the entire premium.
  • A single parent on unemployment with two kids may have to pay 40% of her monthly budget  (about $490) to buy COBRA, leaving less than $750 for rent, food, clothing and utilities.

Individual Insurance

  • Preventive, first dollar coverage is not available in the individual market.
  • Individual insurance plans typically have deductibles ranging from $500 to $10,000. While these  policies protect families from catastrophic loss, they require out of pocket costs that laid-off  workers often cannot afford, and thus deter families from seeking cost-effective preventive care.  In addition, the premiums in the individual market can be very expensive.
  • Those with pre-existing health conditions may be excluded from this market and relegated to the  extremely expensive high risk pool.

Basic Health Plan

  • The BHP currently has a 11,000 person waiting list because of funding shortages.
  • Even if more slots were made available, because of income ceilings, a family of three with one  parent working, and one receiving unemployment could make $100 too much to qualify for the  program.
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