Health Insurance Blog

For many American families, COBRA coverage is still too expensive even with the current COBRA subsidy which is temporarily in place.  The COBRA subsidy program pays 65% of the monthly premiums for up to 15 months, but still can require a substantial monthly expense, as the average family of four still pays on average $389 per month even with the subsidy.

A recent report by eHealthinsurance.com found that in twenty states, families could save $600 per year ($50/mo) by purchasing a family health insurance plan as oppose to opting for the COBRA coverage.  Even with the subsidy!

The twenty states that were found to offer the affordable health insurance identified in the report include:  Alabama, Arizona, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Mississippi, Nebraska, New Mexico, North Carolina, Ohio, Oklahoma, South Dakota, Utah, Wisconsin, and Wyoming.

According to the article “An Extended Subsidy for COBRA Health Coverage” by Kimberly Lankford on The Washington Post’s website, Congress has extended the COBRA Subsidy from 9 months to 15 months.  This is great news for those whose subsidy was coming to an end, still unemployed and worrying about finding affordable individual health insurance.

Last year’s stimulus package originally set up the COBRA subsidy for those who lost their job between 9/1/08 and 12/31/09.  It covered 65% of their COBRA health insurance premium for up to 9 months.  While this was extremely helpful to many, the 9 months is coming to an end for some and unemployment is still up.  With the newly amended law that occurred in late December, these individuals have another 6 months to find relief.

If you were receiving the subsidy, there is nothing you need to do to continue receiving it.  You continue to pay the 35% to COBRA and your former employer is reimbursed by the government for the remaining 65%.  Once your 15 month subsidy expires, you will be responsible to pay for 100% of the premiums in addition to an administrative charge.  COBRA coverage generally only lasts 18 months.

With health care reform just around the corner this may change as well, in addition to changes in medicare supplement plans. It’s important to ensure you have the most up to date information on COBRA and other government health insurance programs.

Workers who lose their jobs and enroll in Government sponsored COBRA coverage will now be able to maintain that health insurance coverage indefinitely until they find replacement coverage ( as long as they continue to pay the monthly premiums).

Previously health coverage via COBRA was only available for a maximum of 18 months after they lose their jobs.

The provision which is not truly “law” yet,  was authored by California Democratic Congresswoman Susan Davis and would become law if the full House and Senate allow it to stay in the underlying health overhaul bill and pass that legislation.

The article “Individual Health Insurance Quotes Better Than COBRA” from TransWorldNews has some great information about choosing between individual health insurance and COBRA.  If you have lost your health insurance through your employer because of cut backs or job loss then you have the choice to shop around for your own individual health insurance policy or go through the COBRA option from your employer.  It can be a tough decision.

COBRA will cover you if you lose your job by allowing you to keep the employer sponsored health insurance for up to 18 months and 9 out of the 18 mos will be at a discounted rate of 65%.  The average health care premium in the US is reaching upwards of $1000 a month so the discount can help, but still may make the cost out of your price range.  That’s when shopping around for health insurance quotes may pay off.  Individual plans are often less expensive and they are customized to meet your individual needs. 

Most consumers to do not realize the actual cost of health insurance since their employer often pays for a large chunk of it.  The sticker shock is often enough to cause some stress once you start shopping around.  It can be overwhelming so obtaining a health insurance broker may help.  The most important thing is to ensure there is no lapse in your health insurance because that can cause hefty bills if something unfortunately happened to you during that uninsured window.

According to the article “Recent Graduates: In the Market for Health Insurance”, by Francesca Lunzer Kritz in The Los Angeles Times, recent college graduates should make obtaining individual health insurance a top priority.

The author offers some great tips to the new graduate.  Thoroughly read and understand your current health insurance coverage.  Often your coverage through your parents ends when you graduate, but it may last longer.  Consider using Cobra for the 36 months after your coverage ends.  If Cobra is not for you or you want something long term be sure to shop around with different carriers or websites that get comparison quotes.  It is often is a good idea to stick with large, reputable carriers. 

Consider all your health insurance options.  Don’t automatically choose catastrophic care and figure in all costs.  Short term plans are often cheaper but do your homework because they often are not the best way to go.  If at all possible continue with your university coverage because typically they offer outstanding benefits at very competitive rates. 

The special enrollment period for those elgible for the COBRA Subsidy Program is coming to a close tommorrow.

The program was available to anyone who lost their jobs between September 1, 2008 and March 17, 2009.

With the COBRA Subsidy Program ending, some options for families in need of individual health insurance coverage include:

1. Enroll in your spouse or partner’s health plan if possible
2. Enroll in an individual health insurance plan
3. Enroll in a short term health plan - generally can purchase up to 12mo. of coverage
4. Enroll in a public health insurance program if available and eligible (ex. Healthy Indiana Plan, or Washington Basic Health Plan)
5. Purchase a low-cost health discount plan as a last resort.

According to Valerie Bauman at Newsday.com, New York’s Governor David Paterson wants to ensure health insurance is more affordable by requiring health insurance companies to get state approval if they are going to raise premiums.

This bill is one of four that Paterson has proposed to help people who can’t afford private health insurance, but do not qualify for Medicaid.  One third of New York’s uninsured is between the ages of 19-29.  Paterson’s proposal would permit families to cover their children up to 29 under insurance through their employer.   Most plans currently stop this kind of coverage at 23.  This could dramatically help families stay insured that fall into this category. 

Also, part of Paterson’s plan is to extend COBRA from 18 months to 36 months, and to cut down on the amount of claims that are inappropriately delayed or denied.  If the deadline cannot be met to review a claim, then the claim would have to be approved by the health insurance company.   All aspects of this proposal have the goal of ensuring health insurance is a fair and smooth process.

AllWebLeads an Austin based insurance lead aggregater has launched a COBRA insurance information site, to help laid off individuals educate themselves about COBRA and COBRA alternatives.  The website is www.cobra-insurance.com

Previously ehealthinsurance.com as well as other health insurance companies have launched stand alone websites that provide COBRA related educational resources.

Individual health insurance plans are viable and affordable health insurance alternaives to COBRA, even when considering the Government backed COBRA subsidy.

Healthinsurancefinders.com has recently published a 2009 Guide for Health insurance for the Unemployed.  The free report can be found at http://www.healthinsurancefinders.com/unemployed/guide/

According to a press release announcing the publishing of the report, the objective of the report is to empower the recently unemployed to become more knowledgeable about finding and purchasing the best health insurance coverage for their needs.

The report includes:  FAQs, a comparison chart with pros and cons of health insurance aspects, and other tips and advice.

More information about various health insurance topics:  health insurance essentials, health insurance glossary, PPO health plans,

The New COBRA Subsidy Bill that subsidizes COBRA payments for workers who have recently lost their jobs, is causing some difficulties for New York health insurance agents.   The subsidy pays for 65% of an eligible  workers COBRA health insurance premiums for up to 9mo.

However, COBRA health coverage, and subsidy, do not apply to employer groups of fewer than 20 employees. For these groups, the New York continuation of coverage program (sometimes called mini-Cobra) applies. Under the “mini-COBRA” program, health insurance companies fund the subsidy and seek reimbursement from the government.

Apparently there is mass confusion among these small employer groups, the health insurance companies are supposed to be paying but they are still trying to get a handle on the situation.

For more information there is guidance on this situation at www.ins.state.ny.us.