Health Insurance Blog

The deadline for unemployed Kentucky residents to apply for health insurance assistance has been extended.  Under the plan, the state will provide 65% premium subsidization to those who have been involuntarily terminated between 9/1/2008 and 12/31/2009, for up to 9 months.

Those individuals who are eligible for subsidized Kentucky health insurance premiums will be notified by the health insurance companies which provided coverage while they were employed.

The plan will be funded by the American Recovery and Investment Act.

Kentucky residents who previously declined coverage via COBRA or state continuation plan, will be given the opportunity to receive health insurance coverage through this plan.

In today’s economy many individuals and families are losing their health insurance coverage for a variety of reasons, including job loss.  There are many viable options for the uninsured, and if you have been unfortunate enough to be in that situation you should explore these options and obtain coverage.

Individual Health Insurance - The best option for individuals without access to employer sponsored coverage.  some states off this coverage to people regardless of health status.

High-Risk Pools - For people who can’t qualify for health insurance coverage due to medical conditions.  High risk pools exist in morethan 30 states.

COBRA - Allows individuals and families to continue their job based health coverage for up to 18-36 months should they be become unemployed.  Previous employer must have 20 employees or more, in order to be eligible. 

State Continuation Plans - are available in some states which provide similar coverage to people who were employed by small companies (<20 employees) but lost their jobs.

Other options that may be available in various states under certain circumstances to uninsured individuals include: HIPAA-Eligible, Conversion Plans, TAA Tax Credits, and Prescription Assistance Plans.

A recent press release by eHealthinsurance.com introduces the launch of a COBRA Subsidy Calculator that can be found on their sister website CobraLearning.com.

The tool was developed to help educate unemployed Americans about how the new stimulus package will effect their COBRA coverage costs as well as what other affordable health insurance options are available.

The COBRA calculator allows health insurance shoppers to input the cost of their monthly COBRA premiums and calculate the out of pocket costs after the 65% subsidy. The calculator also gives shoppers the option to input basic information (gender, date of birth, zip code) to view anonymous quotes on individual health insurance plans as an alternative to COBRA.

As you know, COBRA coverage allows individuals and families the right to continue their group health insurance coverage for up to 18 months if they lose their coverage due to being laid off for example.  However, COBRA only protects people who work in companies with over 20 employees and if the organization is still in business.  In addition, health insurance coverage via COBRA is very expensive.

There are more affordable health insurance options, and probably the best option if it is available to you, is to enroll in a spouse’s group plan as a dependent.   If that isn’t an option, an individual health insurance plan from a private health insurance company would be a much more affordable option than COBRA, and it is likely that you would be able to find a plan that would allow you to continue to see the doctors that you currently use, and with a similar set of benefits.  However, if you have pre-exisiting medical conditions, or are pregnant you may not have the option of enrolling in a new health insurance plan, at least at an affordable price, and sticking with COBRA might be your best option.

Regardless of what you choose to do when faced with this situation, you should never drop your current coverage before you have a new plan in place.

The economic stimulus bill, which was recently passed by Congress and is expected to be signed by President Obama today, includes help for unemployed individuals who are struggling to maintain their health insurance under COBRA. The Los Angeles Times’  Melissa Healy notes that there have been a lot of questions swirling about the topic. Here is an FAQ:

Q: Who qualifies for a COBRA subsidy?

A: Anybody who 1) worked for an employer that is required to offer a COBRA health care coverage extension (some smaller employers aren’t), 2) earns under $150,000 as an individual or $250,000 for a joint tax return, and 3) was either laid off after Sept. 30, 2008 or is laid off between now and Dec. 31, 2009.

Q: How much does the COBRA subsidy cover?

A: The government will subsidize 65% of your premium, paid directly to your former employer.

Q: How long will this subsidy last?

A: It lasts for 9 months in total, including retroactive payments.

Q: What if i’ve been paying the entire COBRA premium myself?

A: In that case, you will be reimbursed for 65% of your premium dating back to Sept. 30, 2008; either in credit for future COBRA payments or a refund if you’re no longer enrolled. You will then have around 4 months left of subsidized COBRA health coverage.

Q: What can I do if I’ve been laid off and didn’t enroll in COBRA because it was too expensive?

A: Employers will be required to allow you another opportunity to sign up for the program.

Q: Do I have to provide proof of income to apply for COBRA?

No, but if it turns out that you make more than the upper limit, you’ll have to pay the subsidy back. 

I hope this post has answered some of your questions about COBRA health insurance.

(Photo credit: abraaten under CC 2.0)

While COBRA is helpful as individual health insurance to those who have been laid off, it is temporary and far more expensive than employer-sponsored health insurance, says Enhanced Online News. Even though the economic stimulus package proposes to pay up to half the cost of COBRA premiums for one year, one of several alternatives may be better suited to your health care needs. All of these options will ensure that you don’t experience a long gap in coverage.

If you expect to find a job with health benefits in the relatively near future, short term health insurance might be your best bet.

If you are generally healthy, high-deductible plans can help you save money on insurance while unemployed. They offer catastrophic coverage with lower premiums and few fringe benefits.

If you had family health insurance at your last employer, buying individual health plans for each member could actually be cheaper than buying a family plan on the open market. Children may also be eligible for enrollment in government-funded health programs like SCHIP.

No matter your situation, get health insurance quotes from various insurers; you may find a better deal than COBRA from another company.

(Photo credit: erik! under CC 2.0)

Judith Graham from the Chicago Tribune recently wrote about the Illinois Comprehensive Health Insurance Plan, and its coverage for those individuals unable to buy Illinois health insurance elsewhere. There is a cap on the number of people that can enroll (currently almost 6,000) in order to ensure that its costs are fully covered by state funding and its premiums, which can’t be higher than 150% of what a regular insurance premium costs in the market. This program is reserved for U.S. citizens and legal residents, and has a $2.5 million cap on lifetime benefits, according to Judith.

Currently, Illinois has about a thousand slots remaining in ICHIP’s traditional pool, so it’s worth looking into if you have unsuccessfully attempted to buy individual health coverage or suffer from certain chronic, uninsurable conditions including:

• Juvenile diabetes
• AIDS
• leukemia
• Parkinson’s disease
• multiple sclerosis
• cystic fibrosis

This program is different from the HIPAA plan, which is intended for those who have lost their employer-sponsored health insurance and exhausted their COBRA unemployment insurance.

In a recent press release, Medica has announced that they are launching a public information program to help Minnesota residents who have lost their jobs find affordable health insurance options.   Minnesota’s unemployment rate was 6.9% and growing as of the end of 2008.  In a nutshell, the objective of the program is to let Minnesota residents know that their are health insurance options that are more viable than COBRA coverage, particularly for those out of work.

According to a recent study, which examines COBRA from an affordability perspective, receiving Minnesota health insurance coverage for a family via COBRA would absorb about 70% on average of that families unemployment benefits.

Medica’s information campaign will include newspaper advertising, billboards, radio spots, advertising on job search sites and social networking sites such as Facebook, and more.

COBRA health insurance coverage is becoming more and more out of reach for Americans who lose their jobs, according to a report by Families USA.   According to the report, Americans who become unemployed and receive unemployment benefits received on avg. $1,278 per month in federal benefits, COBRA health insurance coverage would devour more than80% of that to cover a family.  Needless to say, spending more than 80% of your income on health insurance doesn’t make sense, and doesn’t leave enough money behind for other basic family needs.

The full report from Families USA is online an can be found at www.familiesusa.org/resources/publications/reports/cobra.html.

for information about affordable health insurance plans as an alternative to COBRA.

A.M. Best reports that under an $825 Billion stimulus package proposed by house democrats, many Americans who have been laid off from their jobs since 9/1/2008 could have up to 65% of their COBRA insurance payments subsidized by the federal government.

The house bill that has been named The American Recovery and Reinvestment Act, allocates $39 billion to aid individuals seeking to continue paying their health insurance premiums through COBRA.  COBRA can be very expensive for individuals and families, and only an estimated 20% of those eligible enroll.

As non-group health insurance has evolved over time, and more health care options have become available for those without access to group health plans, individual health insurance has become an increasingly attractive option for families as an alternative to COBRA coverage, primarily due to their cost effectiveness, but somewhat due to the diverse coverage options such as PPOs, HMOs, point-of-service plans, HSAs and other health insurance instruments that years ago were only available to large groups.