Will Healthcare Reform Help Me When My COBRA Expires?
by David Wetzler
If you’ve recently joined the ranks of the unemployed or are worried that you soon will, you may be wondering if the sweeping new health law will help you. Will you, for instance, still be able to get health insurance under the government-mandated Cobra program? If so, for how long? And at what price?
Basically the version of the health law that passed leaves Cobra coverage the way it always was, no changes. But other aspects of the law may provide a little bit of relief for people who can’t afford or are no longer eligible for Cobra.
Here’s where the confusion comes in: coverage under Cobra benefits expires after 18 months. In the House version of the health overhaul, Cobra benefits would have been extended until 2014, when many of the new, state-run health care exchanges, or marketplaces, would be up and running. But the Senate bill, which is the version that was signed into law, included nothing about extending Cobra.
For years, Cobra acted as a bridge for people who were laid off or voluntarily left their jobs until they could find another position, and presumably, another employer-sponsored group health plan to join. But with the nation’s high unemployment rate, more and more workers are finding themselves out of work long enough for Cobra benefits to expire.
That’s what’s happening to B. Smith. Laid off from his manufacturing shop job in February 2008, his Cobra coverage expired on March 31. Soon his unemployment benefits will end as well. Mr. Smith is 62, so he won’t be eligible for Medicare for three more years. He will receive a small payment soon from his former wife’s Social Security benefits, and he is looking for part-time work. Now that he has no health insurance, he is hoping he will be eligible for medical care at the community clinics in her area. Mr. Smith is one of those people who is totally in the gap.
by David Wetzler
If you’ve recently joined the ranks of the unemployed or are worried that you soon will, you may be wondering if the sweeping new health law will help you. Will you, for instance, still be able to get health insurance under the government-mandated Cobra program? If so, for how long? And at what price?
Basically the version of the health law that passed leaves Cobra coverage the way it always was, no changes. But other aspects of the law may provide a little bit of relief for people who can’t afford or are no longer eligible for Cobra.
Here’s where the confusion comes in: coverage under Cobra benefits expires after 18 months. In the House version of the health overhaul, Cobra benefits would have been extended until 2014, when many of the new, state-run health care exchanges, or marketplaces, would be up and running. But the Senate bill, which is the version that was signed into law, included nothing about extending Cobra.
For years, Cobra acted as a bridge for people who were laid off or voluntarily left their jobs until they could find another position, and presumably, another employer-sponsored group health plan to join. But with the nation’s high unemployment rate, more and more workers are finding themselves out of work long enough for Cobra benefits to expire.
That’s what’s happening to B. Smith. Laid off from his manufacturing shop job in February 2008, his Cobra coverage expired on March 31. Soon his unemployment benefits will end as well. Mr. Smith is 62, so he won’t be eligible for Medicare for three more years. He will receive a small payment soon from his former wife’s Social Security benefits, and he is looking for part-time work. Now that he has no health insurance, he is hoping he will be eligible for medical care at the community clinics in her area. Mr. Smith is one of those people who is totally in the gap.
Another problem for laid-off workers is that the Cobra subsidy ended on March 31. The subsidy, which was originally passed as part of the stimulus package, pays 65 percent of laid-off workers’ Cobra payments for a total of 15 months. The average price for family coverage under Cobra is $1,100 a month. With the subsidy, that cost becomes a much more manageable $385. Most experts expect Congress to extend the subsidy again when it returns from its recess. Bills to do so have been introduced in both the House and Senate.
And people who find themselves at the end of their Cobra eligibility, like Mr. Smith, will need to look for alternatives in the independent insurance market or state government-sponsored programs. What follows is some advice for doing so.
Insurance shopping during this interim period has become status quo for many. But if you’re about to become uninsured, the advice bears repeating. Also, there are some aspects of the health care law that go into effect sooner than 2014 that may help.
Cobra Ending Soon
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