By: Revanche

More on post ARRA COBRA coverage

December 14, 2009

I recently discussed the upcoming changes for my health care coverage in 2010.

My ex-benefits office sent an update for the coming year and I was wrong about my ARRA expiration: it’s actually good until the end of April, not the end of March.  My rates, however, still increase to $142/month starting in January, and jump to $410/month post-ARRA expiration.  A relief and a bummer rolled up into one.

Unless a job is secured by that time, the COBRA will take a serious bite out of my savings each month, but I’ll still have the money to pay it.  I just have to reproject the budget to see what the drawdown looks like against my savings accounts.

This New York Times article, Steps to Take Before Cobra Subsidy Ends, notes that some people are expecting their unsubsidized COBRA to reach unsustainable amounts, costing more than half their monthly unemployment.  According to the article, bills are pending in both the House and Senate to extend the subsidy for six months, but I’m skeptical that it would pass in time to affect my budget. 

The Times suggests the following coping techniques:

BUY TIME Yes, the full-price Cobra payments are onerous. But if you pay the first month or two, you will be buying time to see if the subsidy is extended and time to shop around for health insurance alternatives that may be more affordable.
Check ehealthinsurance.com and healthplanone.com for general pricing information from carriers that provide individual policies in your area.

STAY ON TOP OF IT If you’re making the switch to full payments be sure to keep in touch with your Cobra administrator so you will know whether Congress grants an extension, and what you need to do, if anything, to get it.
Depending on your plan and situation, this person may be a staff member of your former employer’s benefits department. Or it may be someone at the insurance company providing your Cobra coverage, or a third-party administrator. Be sure to read through your paperwork and find the person you need to stay in contact with.

LOOK FOR REDUCTIONS With or without the subsidy, family Cobra coverage costs much more than individual coverage or coverage for just you and your spouse.
Without your regular income, your children may well be eligible for the Children’s Health Insurance Program, known as CHIP. It covers children in families that earn too much to qualify for Medicaid, but too little to afford private health insurance. If you can insure your kids through CHIP, Mr. Pollack said, you can significantly reduce your Cobra payment. For more information go to insurekidsnow.gov.

NEWLY LAID OFF? If you have been laid off this month and your employer has promised to cover your health care until the end of December, beware: that magnanimity could work against you.
The way the law is written, workers are eligible for the subsidy only if they are “eligible for Cobra” before Dec. 31, said Kathryn Bakich, national health care compliance director for the Segal Company, a benefits consultant. And simply being laid off in December does not necessarily make you eligible, particularly if your employer-provided coverage is extended through the end of the year.

As with most things to do with the economy and the government’s actions, I view it as a wait and see situation.  With luck, none of you out there really need any of this information!

2 Responses to “More on post ARRA COBRA coverage”

  1. Sense says:

    UGH…what a nightmare! Over $400 a month for COBRA? Is that just for you? Geez, Louise, can we please just get with the program and get national healthcare already?! One shouldn’t have to deal with the double blow of losing both an income stream AND health care benefits all at once. :/

    I’m sorry you’re dealing with that nonsense. Hope the job and/or at least the extension comes soon to alleviate some of the pressure!

  2. Revanche says:

    @Sense: Yes, that’s just for me. I can’t even begin to imagine how much it would cost for a family of four, unsubsidized.

    Actually, I know what it would cost, I have the forms here: $1038.

    Unbelievable!

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