One of the policies passed by the current administration was a subsidy that helps to pay for COBRA medical insurance premiums. The bill, which was passed in the early part of 2009, provided for payment of as much as 60 percent of the COBRA cost for unemployed workers as a part of the stimulus bill. The bill provided for nine months of assistance with premiums.
Currently, those benefits are set to expire. As it stands right now, no one who becomes unemployed after December 31 of this year will be eligible for the subsidy. Still, there are advocates in Washington who are lobbying for an extension of the subsidy. Right now, there are several bills in congress that will expand the program into 2010, and there are also bills that may extend the limit on these payments from just nine months to as long as 15 months.
It isn’t clear right now what form the COBRA subsidy extension will take. What is fairly certain is that Congress will pass some sort of bill after the holiday recess. There is some talk that the bill may provide back payments to those whose subsidy already has expired, but there is also talk that the only change will be extending the subsidy to folks who lose their job after December 31.
If you’re struggling to make your medical insurance payments through COBRA and don’t yet know what the future of the COBRA subsidy will be, you may want to go ahead and pay the full premium for a month while you wait to see what happens in Washington. While this can be a financial hardship, it’s much safer to stay on COBRA so that you don’t run out of options. If you stop paying your COBRA policy, you may not be allowed to go back on the program even if Congress extends the duration of the subsidy.
As always, you should compare your coverage options between COBRA and private medical insurance. You might be surprised to learn that you have a number of different options available to you. In many cases, COBRA is much more expensive than a policy you could take out on your own.
In addition, there are a number of state, local and federal programs that can help folks out with their insurance situation, especially if you have children and are unemployed. Programs like Medicaid can help struggling families make sure their medical needs are covered.
But if you drop COBRA now and buy an individual policy, you run the risk that you may not be allowed to go back on COBRA if Congress extends the subsidy.
Delaying a decision on COBRA is also a good idea because Congress may pass health-care reform in the next few months. Even though many provisions won’t take effect until 2013 or 2014, a few key items could affect people right away — such as provisions that could extend COBRA beyond 18 months until 2013 and changes to maximum coverage limits offered by health-insurance policies, says Langan.
By all means, reassess your options in a month or two. If Congress does not extend the COBRA subsidy and you and your spouse still don’t have jobs with health-insurance benefits, look for a better deal on your own, if you’re healthy. You can shop for individual health-insurance quotes from many companies at eHealthInsurance.com, or get help from a health-insurance broker at www.nahu.org.
Photo via DieselDemon
