With the latest COBRA health insurance subsidy extension expiring last month, it’s not only the newly-unemployed will be watching Congress closely when it returns from recess this week. The first recipients of the COBRA health insurance subsidy are watching their lifeline to affordable health insurance disappearing and wondering what is next if Congress chooses not to pass another extension of the COBRA subsidy.
The COBRA health insurance subsidy was a godsend to the thousands of unemployed who received it as part of the economic stimulus package. First passed in February of 2009, the COBRA health insurance subsidy gave the thousands unemployed during the economic downturn an affordable way to maintain their health insurance for an extended period of time and hopefully, until they could find another job.
Generally, COBRA allows people who leave their job to keep their health insurance through their former employer for 18 months, as long as they pay the full health insurance premium plus an administration fee or 2-3%. However, with the full cost of a family health insurance plan averaging over $13,000 annually, health insurance even through COBRA isn’t affordable to most on an unemployment check.
By subsidizing up to 65% of the COBRA health insurance premiums of those who were laid off, the federal COBRA health insurance subsidy gave many unemployed Americans a realistic chance to maintain their health insurance until they could find another job with health insurance. However, the COBRA health insurance subsidy only lasts 15 months, and the first recipients of the COBRA health insurance subsidy are seeing their benefits expire.
What To Do for Health Insurance if Your COBRA Health Insurance Subsidy is Expiring
If your COBRA health insurance subsidy is expiring, don’t panic! You still have some options for health insurance even without the COBRA health insurance subsidy. Here are some of your most likely health insurance options:
• Health Insurance through COBRA without the Subsidy. Even though the COBRA health insurance subsidy is expiring, you are still eligible for health insurance through COBRA for another three months. Depending on your health status and if you have a pre-existing condition, this may be your best and most affordable option if you need medical care during those three months.
• Private Health Insurance. If you are young and healthy, your may be able to find an individual health insurance policy that covers your healthcare needs and is more affordable than health insurance through COBRA.
• State “Mini-COBRA.” 40 states offer so-called “Mini-COBRA” programs which supplement the main federal COBRA benefits. Mini-COBRA can provide additional health insurance benefits for up to 36 months but can also be an expensive option.
• Medicaid. If you are a low-income American, you may qualify for health insurance coverage through Medicaid.
• State High-Risk Health Insurance Pools. If you have a pre-existing condition and are turned down for private health insurance, you may be eligible for your state high-risk health insurance pool. (Although the new federal high-risk health insurance pools under healthcare reform will be both more affordable and more comprehensive in coverage than the state pools, in order to qualify for a federal pool, you must have been uninsured for at least six months).
• The Children’s Health Insurance Program (CHIP). Even if you are unable to afford health insurance for yourself, your children may qualify for the Children’s Health Insurance Program (usually called “CHIP”).
For more on health insurance options, visit MyHealthCafe.com:
Pre-existing Conditions-What You Need to Know
State High-Risk Health Insurance Pools
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