Health Insurance Blog

Tough times are resulting in many people being laid off from their jobs, and losing their health insurance as a result. They may be unable to afford COBRA, but still need health care. In the Columbus Dispatch, an article highlights several actions Ohio doctors are taking to help their patients without insurance. Despite their generosity, it is important to regain insurance as soon as possible: do so before insurers will no longer be required to cover any pre-existing conditions you may have. 

Some doctors are creating monthly payment plans that charge as little as $5 for those in dire straits and lacking Ohio health insurance. If they have some rate flexibility, they are charging the lowest amount possible to the uninsured. A lot of medical professionals give poorer patients free samples of prescription medication, although the economy is causing drug manufacturers to cut back on that practice as well. Meanwhile, prescriptions of generic drugs are more common, because they are far more affordable for uninsured patients. 

The article also states that medical practices are assisting patients in applying for government assistance programs, such as those for children’s health insurance. 

(Photo credit: Lauren Nelson under CC 2.0)

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.

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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.

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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.

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.

Keith L. Martin of the Insurance and Financial Advisor just reported on a new proposal by Governor David Paterson regarding New York health insurance. He wants to expand health care coverage by mandating that health insurance companies cover policy dependents up to age 29, at the policyholder’s own expense. Currently, parents’ health insurance plans in New York state cover their children until they are either 18 if they aren’t enrolled in college, or 22 years old if they are.

This age group is at increased risk for being without health insurance: many 19-to-29 year olds are either unemployed and struggling to find jobs, laid off, or working in positions that don’t offer health insurance. Individual health plans are usually far more expensive than group coverage.

Paterson’s legislation will address those issues, in addition to possible provisions for any grandchildren of the policyholder. Keith says that this proposal is a step towards universal health care reform by controlling medical costs and including a large group of generally healthy people in the pool to spread risk. This demographic is a low-risk pool for insurers, but could have a negative effect on smaller employers.

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The baby boomer generation (ages 45 to 64) is worried about losing their health insurance, and the current economy is even more cause for concern. Many baby boomers have been either laid off or forced to retire early, and with that comes the loss of their employer sponsored health insurance plan. Meanwhile, they’re not yet old enough to enroll in Medicare.

There are still several options available to people in this age group, says Emily Brandon of U.S. News and World Report. They include:

1. Continuing your former employer’s coverage through COBRA, which they are required to offer unless they go out of business. However, you will have to cover the entire cost of the plan, plus a 2% administrative fee, yourself.
2. Getting on your spouse’s health insurance, if they have continued to work and their employer allows it.
3. Finding another job and continuing to work until you turn 65. Some companies even offer health insurance benefits to part-time employees working as little as 20 hours per week.
4. If you’re lucky to have worked for a firm that offers health insurance coverage to retirees (a steadily declining percentage), take advantage of it. Don’t rest easy, though; many companies are failing to keep their promises and are shifting a higher portion of health care costs onto retired workers.
5. Buy yourself individual insurance. Individual health insurance policies can be expensive, with premiums of over $300 per month according to the Commonwealth Fund. It also may not cover you if you have a chronic, pre-existing condition (and will be even more costly if it does), but if you are relatively healthy it may be your only option. A high-deductible plan could save you money on premiums, although you run the risk of catastrophic out-of-pocket costs. If you go down this route, make sure to research the most affordable health insurance quotes.

There is also the option of forgoing health insurance, but it’s not recommended. You’d either have to cover all of your medical expenses out-of-pocket, or go without some needed medical care.