Subscribe to this BlogCOBRA subsidy for jobless expires soon
Many workers unfortunate enough to get the ax in this recession at least had one thing working in their favor: subsidized health insurance. This past February Congress threw out a temporary life preserver for workers laid off between September 1, 2008, and December 31, 2009: For up to nine months, Uncle Sam covers 65% of the monthly premium that these newly unemployed people have to pay to stay on their company health care plan. Previously, if you stuck with your company benefits (under the federal program known as COBRA), you had to pay your share of the monthly premium, plus how much your employer covered. For singles, that totaled an average of $400 a month, according to Kaiser Family Foundation; for families, it came to $1,050.
Thanks to this new subsidy, 38% of unemployed workers are opting to remain on the company health plan, double the number that typically stick with it, according to a study from Hewitt Associates, a human resources consulting firm.
But now that lifeline is running out. For workers who still haven't found work and began receiving the subsidy on the first possible date, March 1, the benefits are set to expire at the end of November. This story from Kaiser Health News points out that there is some talk in Congress to extend the program beyond nine months, but no green light so far.
So once that subsidy disappears, where should the unemployed turn for health insurance? Check out my story from our May issue that explains your options.
Also, if you are fearful you may soon lose your job, listen up: If you are laid off in November or December, you still qualify for the subsidy for up to nine months. But come January, unless Congress extends the program, you are out of luck. So if you receive the bad news of a pink slip anytime soon, aim for your end date to be in the 2009 calendar year, and not 2010. You may save hundreds of dollars on health premiums.
If you were recently laid off, how have you been managing your health insurance and health care?
I was laid off Sept 2009 and have not been able to even get work at McD's or Walmart! I was in management before. I'm getting the subsidized COBRA and, even though it's just for myself, I'm still going in the hole every month that passes without work. I've applied to BC/BS of FL for one of those catastrophic plans. Yes, the deductible is high– $1000/year– and the ER visit, if you're not admitted as a result, makes you pay up to $2500! BUT, thank God I'm in really good health and am banking on staying healthy enough to avoid having to outlay that kind of cash. People just cannot afford to go without health insurance. It could bankrupt them when major illnesses or accidents happen. It's tough right now but, in my case, I gave up cable, cut my grocery bill in half, drive as little as possible for errands (combining trips), and basically have gone into a financial starvation mode for now. What else can you do?
I've been out of work for over a year and cannot COBRA. If I get sick, I stay home and pray I get better. If not, then I stay home to die. I am 58 years old. It is more important to give the stimulus money to large corporations and wall street so they can balance thier books and give out healthy bonuses to all the employees. God forbid a wall street employee or banker go without bonuses or pay increases. I guess this administration has also been bought out by Wall street. We are fast becoming a nation where only wealthy people and healthy people can survive. Greed is a wonderful thing!
The government has go to get off it's ass and take care of the American people. Letting this lapse is short sighted at best and criminal at worst. It seems that if you don't have an Inc. behind your name you don't get "bailed out".
I live in Palm Beach County Florida and our unemployment rate exceeds 12%. People are having a hard time even finding a job at a fast food place or Walmart. My company closed the doors last November and I have been unemployed since. My wife is a Kidney transplant patient and her medication (which is life sustaining) has a copay of 200.00 a month. My COBRA now goes up to 811.00 a month. I have been doing a delicate balancing act keeping around 3800.00 in the bank with a little help from family. Now we are dead meat. This premium increase will leave me totally broke by Febuary 2010. I hope I find work soon. Does anyone need a Computer Support person soon to be MCSE? rpa122112@gmail.com. I am 54 years old today. I am not set in my ways and my mind thinks I am still in my twenties.
This does not work for people such as myself. I was laid off on December 5, 2008 from Holy Cross Hospital in Fort Lauderdale, Florida. After taking cobra, thinking that I was going to take atvantage of the 65%. I was told that I worked for a catholic facility and they were exempt from this…. So I am paying 100% for cobra and am unemployed.
I've just lost my employment from a small company, along with the health insurance it provided. The Blue Shield health insurance premium for my family (self, spouse & children) was over $3,650 per month… that's right, PER MONTH. Tack on the 10% increase for COBRA and we're looking at a monthly premium of over $4,000. The Stimulus subsidy will lower that to about $1,400/month for 9 months, but if I haven't found employment with benefits by then we're pretty hosed, especially with wife and 2 kids with pre-existing conditions. Can't believe the Democrats have squandered their advantage over health care reform, but even the most vigorous reform wouldn't be of any help in my situation. Yikes!
This Administration had a good idea but was poorly executed. I thought the idea behind this was to assist the unemployed during this hardship. I've been unemployed since December 2008. My former employer paid for my COBRA for the first six months and also reaped the benefits of this program. I am grateful my former employer paid six months of my COBRA, but am shocked that again Corporate America received another form of Bailout! The nine month coverage was cut short for me, because my former employer claimed four months of my nine month COBRA subsidy. I'm on COBRA and will remain on COBRA until I land another job or until my COBRA coverage expires. I do not understand why an employer should receive the benefit from COBRA being subsidized. Again, this Administration is rushing to sign any policy into effect. I wish they would have taken the time to ensure this program would have only benefited the unemployed worker. If they can’t make this simple program work…God help us with their Healthcare reform!
Actually, just being laid off in December does not mean you're eligible for the subsidy. You have to be laid off and begin your COBRA by Dec. 31 unless the law is extended.
If you are laid off in December and your COBRA begins Jan. 1, you will not get the subsidy unless the law is extended.
I have been told that in order to qualify not only do you have to have a termination date on or before 12.31.09 but you have to be enrolled on COBRA on / before 12.31.09 so if your employer's coverage remains active until the end of the month in which you terminate, you actually need to have a termination date on or before 11.30.09. I don't think many people understand this.
Luke from Vienna: Why don't we just bring back the "poor houses" and work farms and orphanages? I bet your conservative politicians would vote for that! And while they're at it, how about indentured servitude…problem solved.
Those short term insuranc plans that last for 6 months force you to sign away your HPPA rights. And, God forbid you should use it during those six months for something chronic. Once your six months are up, try and re-up it throught the same company, they'll reject you.
For those with health issues, like myself, the expiration of the subsidy will be difficult. My healthier wife was able to replacecobra.com and lower our monthly costs for the family. The kids are on a CHIP program thru the state. I wish everyone the best in the recovery, and I hope our lawmakers extend to those who need it the most.
to: Chad, Phoenix, AZ: in regards to do it yourself instead of having the government take care of you.. What about if your uninsurable because of pre-existing health conditions? Or is the American way since the 40's been if your sick you don't deserve to live? I see it every day working in the insurance industry.. they only want money from healthy people who won't use the services.. If i was to lose my employer sponsered health plan I'd be declined coverage in the real world, unless I elected COBRA for 18 months at the outragous prices to guarantee my elgiblity as a guarantee issue canidate. but who could afford to take 18 months of full premium insurance once you've lost your job? Thats 7200 for a single or 18000$ for a family according to Kaisers numbers.
Gee, I wish someone had subsidised my COBRA payments while I was out of work in 2007. $428 per month is a lot of dough. With a 65% subsidy, that comes to 149.80 per month, which is a lot more reasonable. I guess you just have to be in the right place at the right time.
Worse than the monthly cost, though, is getting any coverage at all if you have a serious pre-ex. From what I've been able to determine, most outfits won't even exclude the pre-ex and cover everything else (someone correct me if I'm wrong). That's not a good situation at all.
Luke from Vienna, what an interesting idea! So a company could make someone unemployed, then "receive the services" of that unemployed person (for free or the health insurance premiums)? Definitely a win for the company. Perhaps you should recommend this to your boss, I'm sure you would learn something from that "real-world experience".
Uncle Sam does not pay the 65% of your premium, your former employer pays that portion
Actually, the government reimburses the coverage provider via a tax credit. So I think it's safe to say that Uncle Sam is footing the bill.
— Editor
The public option isn't FREE. Look at private, affordable catastrophic plans (Yes, they do exist) or start saving. Take responsibility for yourself and don't depend on the government or someone else to do it for you.
I was laid off in April, without this subsidy, my nest egg would be gone. I also think you would be adding more and more housing forclosures to the list without this subsidy. The federal govt needs to extend this until unemployment numbers start to subside. This recession is over for the economist but for those of us that are unemployed it still continues. GET ON THE BALL OBAMA!
There's too much subsidizing of people not working. As a taxpayer, we should be demanding the unemployed to work for their insurance coverage.
It would be helpful to small businesses to receive the services of the unemployed (for free or the health insurance premiums) in order to give the unemployed real-world experience and to lower the cost and increase the competitiveness of those companies. win-win-win for individual, company, and taxpayer.
Paying people to remain unemployed is a waste for everyone and society. We have to take better advantage of this valuable human capital.
This is one progam they should continue or at least extend to the newly laid off through 2010. It should help to stop (or at least put off) some personal bankruptcies due to medical expenses from unemployed people. At least if you get laid off and you get help with health insurance you know you're covered when looking for a job and don't have to put off needed doc appts and go into interviews sick or worried abotu your health for 9 months anyway.
COBRA is great IF your company maintains it's plan. In my case, the company canceled it's plan so my COBRA went away. So, COBRA is worthless for people in similar positions. Now I have to find health insurance, deal with pre-existing, not to mention the cost!
I'm a little comfused is it December 31st or the end of November? My daughter was layed off November 9th and her Cobra rate as of December 1 did not include the subsidy.