According to EBRI's findings, COBRA beneficiaries are morelikely to have certain health conditions, such as chronicobstructive pulmonary disease or diabetes. (Photo:Shutterstock)

Individuals who are covered by COBRA are "systematicallydifferent" than the full-time workers who receive benefits throughan employer, including the fact that COBRA beneficiaries rack up300% more in total health care costs, according to a report from Employee BenefitResearch Institute released Thursday.

The study, which EBRI asserts is the first of its kind, comes inthe wake of calls to expand access to COBRA coverage asmore than 17.8 million Americans find themselves out of work duringthe coronavirus pandemic, according to U.S. Department of Labordata.

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The EBRI research found that COBRA beneficiaries skew older thanfull-time employees. On average, COBRA enrollees are 50 years old,whereas full-time workers are 42.6 years old.

The report also contends that COBRA beneficiaries are morelikely to have certain health conditions, such as chronicobstructive pulmonary disease, diabetes, cancer, high bloodpressure, high cholesterol, mental health disorders andmusculoskeletal disorders. This group also tends to use outpatientservices more frequently, according to the study. For instance, theaverage COBRA beneficiary with individual coverage "usedpsychotherapist services nearly four times more frequently than theaverage person with coverage through a full-time employee andphysical therapy services more than two times as frequently," thestudy says.

The data shows that COBRA enrollees typically take advantage ofmore health care services and spend significantly more than theaverage full-timer. In 2018, full-time employees with employee-onlycoverage used an average of $6,724 in health care services, butCOBRA beneficiaries incurred about 300% more in health care costs,averaging $18,752.

One potential way to drive down this adverse selection issubsidies, according to the report. With more competitively pricedplans, COBRA might be able to enroll individuals with fewer healthconditions, lowering the employer's risk pool. Yet the study notesthat the Affordable Care Act has already helped to lower the ratioof spending by COBRA beneficiaries compared to full-timeworkers.

"The implementation of ACA exchanges appears to have somewhatmitigated adverse selection against employer plans. Mostnewly-separated workers no longer have COBRA as their only choicefor health insurance," Paul Fronstin, director of the HealthResearch and Education Program at EBRI and co-author of the study,said in a statement. "ACA exchanges serve as a viable alternativeto maintain health insurance coverage. As a result, the ratio ofspending by COBRA enrollees to spending by those covered by afull-time worker with an employer-sponsored plan has decreasedsteadily over time, and this trend holds for both individualcoverage and family coverage."

Additionally, since COBRA beneficiaries spend more on healthcare services on average, providing COBRA subsidies to newlyunemployed Americans could "be beneficial from a public policyperspective by improving the risk pool for COBRA claimants," theEBRI research found.

"The systematically higher spenders who have historicallyclaimed COBRA benefits might instead be balanced out by marginallyhealthier former workers that choose to enroll on account ofreceiving a subsidy," Fronstin said. "The ratio of spending bythose covered by COBRA to those covered by a full-time employee hasdropped over time, however, indicating that the adverse selectionmechanism has already been slightly moderated."

Read more:

• COBRA continuation benefits: Furlough vs. layoff
• Industry group calls for expanded COBRA coverage
• 4 ways to get ahead of the COBRA subsidy curve