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Business and Individual Insurance Specialists

Loss Of Health Insurance Through Unemployment Means Many Skip Needed Health Care

Nearly three-quarters (72%) of people who lost their health insurance when they lost their jobs over the last two years said that they skipped needed health care or did not fill prescriptions because of cost, according to a new Commonwealth Fund report. The same proportion is also struggling with medical bills or medical debt, compared to about half (49%) who lost jobs but not their health insurance.

Six in 10 working Americans rely on health insurance obtained through their employer, and when an estimated 15 million working-age adults lost their jobs and their employer-based insurance between 2008 and 2010, 9 million became uninsured. Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), people employed by companies with 20 or more workers and have health insurance sponsored by that company can keep their health insurance for up to 18 months if they lose their job. However, because unemployed workers must pay the full premium, few people elect to continue their coverage through COBRA.

The report finds that once the major coverage provisions of the Affordable Care Act are implemented in 2014, job loss will not automatically mean going without health insurance, because the newly unemployed will have greatly expanded health insurance options, including subsidies to purchase insurance through exchanges, and expanded access to Medicaid coverage.

"Currently, for a majority of Americans, losing a job also means losing health insurance," said Commonwealth Fund Vice President and report co-author Sara Collins. "To make matters worse, once you are unemployed and uninsured, it's nearly impossible to afford COBRA or buy an individual policy. However, when it is fully implemented in 2014, the Affordable Care Act will usher in a new era for the unemployed, who will have a variety of options for comprehensive and affordable health insurance."

Unemployed, Uninsured, and Without Insurance Options

The report, based on findings from The 2010 Commonwealth Fund Biennial Health Insurance Survey, notes that in 2010, 57 percent of those who said they had lost their job with health benefits in the past two years became uninsured because they had limited options for acquiring affordable health insurance that met their needs. In Realizing Health Reform's Potential: When Unemployed Means Uninsured: The Toll of Job Loss on Health Coverage and How the Affordable Care Act Will Help, the authors find that COBRA is less likely to be an option for those who need it most: only 25 percent of workers with incomes less than 133 percent of poverty (just under $30,000 for a family of four in 2010) would have been eligible for COBRA if they had lost their jobs, compared with 73 percent of workers with household incomes at 400 percent of poverty or more (just over $88,000 for a family of four in 2010).

The American Recovery and Reinvestment Act of 2009 substantially offset the cost of COBRA for some unemployed workers by covering 65 percent of their COBRA premiums. Despite the fact that several studies have found that COBRA enrollment among eligible individuals increased after the subsidies went into effect, helping millions of people who lost their jobs stay insured, these subsidies have not been offered to newly laid-off workers since last year.

New Mexico and the Affordable Health Care Act in 2011

ALBUQUERQUE, N.M. - The provisions of the federal Affordable Health Care Act will not be fully in place before 2014. Currently in place, however, are provisions that allow dependents to stay on their parents' policy until age 26, coverage for children with pre-existing conditions and preventative services for seniors without co-pays.

Another change calls for an end to cutting-off services when enrollees become seriously ill. Legislative Committee Chair Dick Mason with Health Action New Mexico points out other ways New Mexicans benefit.

"In 2010, there was funding for community-based health care centers. There's (sic) 133 of those in New Mexico. There was also funding for school-based health care centers. There are 81 of those in New Mexico."

The Affordable Care Act re-authorized the Children's Health Insurance Program through 2015. In addition, it re-authorized the Indian Health Care Improvement Act, making previously uncovered services available at no additional cost to New Mexico taxpayers.

Dr. Dan Derksen, director of the New Mexico Office of Health Care Reform, says the state strenuously opposes a federally established insurance exchange. He admits that it is not yet clear what the government plans to do and has stated that many people believe it will offer a one-size-fits-all program.

Derksen favors the advantages of a state-based insurance exchange, instead.

"I believe that doing a state-based exchange will offer people more choices. It won't force them to buy things that they don't really want or need. It will give them more providers. It will give them more choices in the type of cost-sharing that they want to do."

In reference to cost-sharing, Derksen points out that the state-based exchange might allow a high-deductible plan or other options to help enrollees save money. He says the state's Office of Health Care Reform wants to be sure that the New Mexico state-based exchange is built on the fundamental principles of real consumer choices.

Health Insurance Premiums Take Uphill Climb in Every State

According to a recent report published on November 17, the employer-sponsored health insurance premiums have increased quicker compared to the revenues in each of the country’s states.

The Commonwealth Fund’s analysis of federal data has put more light on the state-by-state picture at the same time as basically affirming a countrywide trend of having better premiums for meager advantages. Commonwealth Fund is an independent research organization.

For the recorded annual total premiums, the highest went to the District of Columbia, which included both the share of the employer and the worker. Back in 2010, the premiums averaged to $15,206 for family version and $5,644 for a single policy, seeing an increase by 41% and 51% respectively, ever since 2003.

However, the expenses were noteworthy even to some of the lowest average rating states like Alabama, wherein an average of $4,571 for single policy and $12,409 for family version in total premiums. Virginia and Maryland were approximately in the pack’s middle phase.

The co-author of the study, Cathy Schoen expressed that even though the employees generally do not see the overall expenditure of their insurance premium, the quick increase, as a result, indicates lower salaries and wages as employers formulate the transaction involving offering insurance and increasing wages.

With Schoen’s study, she found that there was a little relationship between the cost of living in the state and its average premiums. Some of the highest premiums in the country belong to the states where revenues are lower than the standard such as West Virginia and New Mexico.

Schoen stated that the discrepancy was due to various factors like how generous the plans of the employers were in any given state.

Moreover, she noted that the premiums are lower if the deductibles have a tendency to be that higher.

Health insurance companies drop NM policies for individuals, small groups

National Health, Aetna, John Alden, and Principal all have told the state’s Division of Insurance that they will no longer write individual or small group plans in New Mexico, according to a Public Regulation Commission spokesman.

Some companies discontinuing coverage will renew their customers’ existing policies, but some will not spokesman Gerald Gardner told The Independent.

The companies say they need to make adjustments in their business to accommodate the nation’s new federal health care law, which forces them to expand coverage by forbidding them to deny coverage to children with preexisting conditions, among other measures.

Several of the state’s largest insurers are already severely restricting new child-only policies.

“After careful consideration of the recently enacted federal healthcare legislation, National Health Insurance Company has determined that it will not be able to meet the requirements set forth by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010,” president Charles Harris wrote in a letter announcing the decision.

A call to Harris by the Independent was not returned.

It’s unclear exactly how many New Mexicans will be affected by the change. National Health’s decision not to renew individual plans will affect 60 policies.

One company is working to transfer thousands of insurance policies to another insurer, Garner said.

“Apparently Principal is coordinating with United Health Care to transfer an estimated 3,600 insured consumers to United (replacement policies),” Garner wrote The Independent on Monday. “Principal is withdrawing from all group medical markets and exiting the medical insurance business in all of the company’s existing markets.”

Garner said Principal “says it will notify group policyholders and covered persons” and give 180 days written notice of its intent to discontinue and non-renew coverage.