Why Only 10% of Unemployed Workers Get COBRA Health Coverage
Author: Commonwealth Fund
Published: 2009/01/23 - Updated: 2026/01/19
Publication Type: Data & Statistical Analysis
Category Topic: Insurance - Related Publications
Page Content: Synopsis - Introduction - Main - Insights, Updates
Synopsis: This research from The Commonwealth Fund presents critical data analysis examining COBRA health insurance uptake among unemployed workers during economic downturns. The findings prove particularly valuable for people facing job loss, individuals with disabilities who depend on continuous health coverage, and policymakers developing safety net programs. Drawing on statistical evidence from workforce studies, the analysis demonstrates that while 66% of workers qualify for COBRA continuation coverage if laid off, affordability barriers prevent access - premiums average $4,704 annually for individuals and $12,680 for families, representing four to six times what employees previously contributed. Low-wage workers face additional disadvantages, with only 38% eligible for COBRA benefits because many lack employer-sponsored insurance or work for small firms exempt from COBRA requirements. The research carries authority as a Commonwealth Fund publication, an organization recognized for independent health policy research, making it essential reading for anyone navigating unemployment while managing health conditions or disabilities - Disabled World (DW).
Introduction
As US unemployment rates reach the highest levels in 16 years, a new analysis from The Commonwealth Fund finds that few laid-off workers - only 9 percent - took up coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA).
Main Content
Low-income need new coverage options and financial assistance to keep health insurance.
As US unemployment rates reach the highest levels in 16 years, a new analysis from The Commonwealth Fund finds that few laid-off workers - only 9 percent - took up coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) in 2006.
Unemployed workers who also lose their health insurance would need substantial financial assistance, covering 75 to 85 percent of their health insurance premiums, for their premium contributions to remain at the levels they paid while they were working, according to the report, Maintaining Health Insurance During a Recession: Likely COBRA Eligibility, by Michelle M. Doty, director of survey research at The Commonwealth Fund and colleagues.
The report also finds that low-wage workers are at a particular disadvantage - with only 38 percent eligible to receive COBRA benefits - because they don't receive health insurance through their jobs, work for small firms that aren't required to offer COBRA, or are uninsured to begin with.
Coverage options for low-income workers remain limited especially for childless adults because most lack a public coverage option. The authors say that policymakers should consider temporarily expanding Medicaid and SCHIP eligibility to unemployed adults with low incomes, with assistance for premium shares, to provide critical support to families.
Sixty-six percent of all current workers, if laid off, would be eligible to extend their health insurance under COBRA. But, for most people, COBRA payments are un-affordable, about four to six times higher than the amount of money they contributed to their health insurance when they were employed.
According to the report, millions of the eligible could keep their coverage if they could get assistance with their premiums, which average $4,704 per year for an individual and $12,680 a year for a family.
"Americans are losing their jobs at an alarming pace and this report clearly shows that many people cannot afford to take on the expense of COBRA just as they lose their income," said Commonwealth Fund President Karen Davis. "The number of uninsured Americans could grow markedly during this recession unless we take action to help unemployed Americans keep their health care coverage."
The Commonwealth Fund is a private foundation supporting independent research on health policy reform and a high performance health system.
Insights, Analysis, and Developments
Editorial Note: The gap between COBRA eligibility and actual enrollment reveals a fundamental flaw in America's employment-based health insurance system - one that hits hardest when people are most vulnerable. For workers with chronic conditions, disabilities, or ongoing medical needs, losing both income and affordable health coverage simultaneously creates an impossible choice. While recent legislative efforts have introduced temporary premium subsidies during economic crises, the underlying issue persists: continuation coverage designed as a safety net remains financially out of reach for those who need it most. Until policymakers address this contradiction through expanded public coverage options or substantial premium assistance programs, millions of unemployed Americans will continue falling through the cracks, forced to choose between paying rent and maintaining the medications or treatments that keep them healthy and functional - Disabled World (DW).Attribution/Source(s): This quality-reviewed publication was selected for publishing by the editors of Disabled World (DW) due to its relevance to the disability community. Originally authored by Commonwealth Fund and published on 2009/01/23, this content may have been edited for style, clarity, or brevity.