Unemployed Americans are struggling to get promised free health insurance in a pandemic

Paige Santillo worries that she will not be able to pay for her medication without health insurance.

Source: Paige Santillo

Government aid seemed to be getting to Paige Santillo on time.

Due to the pandemic, Santillo was dismissed from her job as marketing manager at Informa publishing house in October. As part of their severance package, the company paid their COBRA health insurance premiums until April. In May she would be alone with the $ 700 bill.

She did not know if she could afford this tab and feared she would have to stop taking her anti-anxiety and depression medication without cover. But then the US bailout was passed in March, and the $ 1.9 trillion stimulus package included a provision that provided many unemployed people with free health coverage through COBRA for six months from April 1.

However, when Santillo called WageWorks, the company that runs COBRA coverage for Informa, in mid-April to sign up for free coverage, she was told that the subsidy was not yet available. And her May bonus was still due.

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“They said they were waiting for further instructions from the Department of Labor,” said 28-year-old Santillo. “I do not know what to do.

“I take medication,” she added. “If I stopped taking it, it would destroy any progress I’ve made.”

WageWorks did not respond to a request for comment.

CNBC has heard from around a dozen other people, like Santillo, trying to fail the government’s promise to get six months of free health coverage through COBRA.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, gives individuals who leave a company the option to stay on their employment insurance. However, this is usually prohibitive as a person has to pay the usual portion of their monthly premium plus the portion of their insurance paid by their former employer. The typical annual premium for work-related coverage in 2020 was $ 7,470 for individuals and $ 21,342 for families, according to the Kaiser Family Foundation.

But now that coverage is free until September for those who involuntarily left their jobs, there is likely to be a huge demand for it, according to health experts.

It is estimated that more than 16 million people lost their employer-sponsored health insurance during the pandemic.

However, it is unclear how much success people will have in trying to access relief.

The people who reached out to CNBC said their former employers and insurers had given them confusing information and were unsure when to offer the free coverage, which made them feel like they had to pay or risk the expensive premiums themselves, to lose health care.

Recently, the Department of Labor released a form that individuals can provide to their employer to apply for the grant.

However, when Santillo tried to submit the document to Informa and it was forwarded to WageWorks, the latter informed her that it was still waiting on instructions from the Department of Labor.

“Everyone points their fingers,” said Santillo.

Informa did not respond to a request for comment.

Caitlin Donovan, a spokeswoman for the Patient Advocate Foundation, has also heard from people struggling to get access to the six months of subsidized insurance.

“The process wasn’t particularly patient-friendly,” she said.

The stress of losing my 16 year old job in a pandemic has been bad, but not knowing when I can afford to see a doctor is worse.

She suspects employers are a little skeptical when they offer it. While the IRS is expected to reimburse companies for the costs in the form of a tax credit, the agency has yet to issue guidance on how this process will work.

“Unfortunately, much of the legislative language regarding Covid subsidies has been ambiguous and confusing,” Donovan said. “Even the most accomplished employer can be cautious about signing people up for plans under these conditions.”

Grant Vaught, a spokesman for the Department of Labor that administers the COBRA grant, said plans should not collect premium payments from eligible individuals during the exemption period. And he said anyone who feels they have been wrongly denied assistance should contact a Department of Labor benefits advisor through his website or by calling 1-866-444-3272. (Many unemployed people are also eligible for free health insurance from the Affordable Care Act market.)

He said the department has issued guidelines on free coverage and is encouraging all employers to let people know of their eligibility as soon as possible, though they are not legally required to do so until late May. That is another concern of health care advocates.

“It’s available for such a short time and you won’t find out about it until May 31st?” said Sabrina Corlette, co-director of the Center for Health Insurance Reforms at the McCourt School of Public Policy at Georgetown University.

“Lots of people may be missing out on the opportunity.”

Knowing about the relief was no problem for Peter Dorton. Access to it was.

He cannot afford his monthly COBRA premium of $ 850 without the government promised subsidy. In March 2020, 53-year-old Dorton was fired from his job as a waiter at The View at the Marriott Marquis, where he had worked for nearly two decades. He was eventually released.

Marriott paid his health insurance premiums for a year, but he would be alone with the bill in April. The government’s relief came just in time, he hoped.

Peter Dorton is afraid to visit his cardiologist until he knows that he is covered by COBRA.

Source: Pete Dalton

When Dorton called Marriott Human Resources on April 16, he stated that he was entitled to free COBRA coverage through September.

The rep had other news for him.

“We don’t have a timeframe as to when they’ll decide what to do with the bailout plan,” she told him, more than a month after the package became law, according to a recording shared with CNBC by Dorton.

“We were only told they were reviewing the legislation,” she said.

In the meantime, she said, certain treatments might not be covered because he didn’t make a COBRA payment himself.

As a result, Dorton has not visited his cardiologist, even though he has a pacemaker and should be checked regularly.

“The stress of losing my 16-year-old job in a pandemic has been bad, but not knowing when I can afford to see a doctor is worse,” he said.

Julie Rollend, Marriott’s public relations director, said the company is working hard to ensure all eligible former employees have free COBRA coverage from April through September.

“Marriott expects all required notices to be released in good time by May 31,” said Rollend.

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