As we keep sifting through the healthcare reform fall-out, one of the topics that we haven’t addressed yet, it one of the most popular and requested topics on MyHealthCafe.com, COBRA health insurance coverage. How does the newly-passed healthcare reform affect COBRA? Will healthcare reform affect how much COBRA health insurance coverage will cost? Are there options for health insurance under healthcare reform that are better than COBRA? Well, today, we’ll be going through vital questions like these one by one.
How Does Healthcare Reform Affect COBRA?
The short answer is no, healthcare reform does not seem to affect COBRA itself. Versions of the House bill tinkered with extending COBRA out until 2014, when the health insurance exchanges will be up and running, but the measure did not ultimately pass, and COBRA was left untouched by healthcare reform.
However, as a practical matter, since COBRA is still the main way for many unemployed Americans to continue their health insurance coverage until they can find either new employer-based health insurance or individual health insurance policies, healthcare reform does open up some new alternatives for health insurance that may benefit many unemployed Americans.
Will Healthcare Reform Affect How Much COBRA Health Insurance Coverage Will Cost?
No, and unfortunately, the latest extension of the federal subsidy of COBRA payments only extends to workers who became unemployed before March 31. Originally passed as part of the economic stimulus package, the federal subsidy pays for up to 65% of COBRA health insurance premiums for 15 months, an enormous aid when the average COBRA health insurance premium is well over $1,000 a month without the subsidy.
The good news is that there is much current speculation that the COBRA health insurance subsidy will be extended again once Congress returns from recess, but no extension is in place yet.
What Other Options For Health Insurance Does Healthcare Reform Offer if You Are Unemployed?
If you are unemployed, the additional health insurance options you may currently have under healthcare reform vary depending on your circumstances:
• If you are under the age of 26, in most cases you will be eligible to be added to a parent’s health insurance policy starting in September of this year. This does not apply if your parents are on Medicare, and your parent(s) would be required to pay the additional health insurance premium; however, if you are young and healthy, any additional premium should be relatively minimal.
• If you have been without health insurance for six months or more and have been denied health insurance coverage or cannot afford it, you are probably eligible for the interim high-risk health insurance pool which will be in place by the end of June. These interim high-risk health insurance pools are a stop-gap measure to provide health insurance to people with pre-existing conditions and can’t otherwise get health insurance until 2014 when the health insurance exchanges are up and running.
• If you have recently been laid-off, we still advise you to consider signing up for COBRA health insurance coverage, especially if you have a pre-existing condition. You do have 60 days to elect COBRA, so you are free to use all 60 days to find alternative health insurance that may be more affordable (and save the two month’s worth of premiums if you do find other coverage in that time). Although no COBRA subsidy extension is currently in place, chances are, Congress will pass an extension of the subsidy and it’s fairly likely to be retroactive i.e. you could get a refund of any premiums it turns out you overpaid after the subsidy is extended.
• If your COBRA health insurance coverage is running out, now is the time to shop around for health insurance. In addition to the employer-based health insurance and private health insurance policies, you may want to investigate Medicaid and/or the Children’s Health Insurance Program (CHIP). Under the new healthcare reform, the states are barred from cutting the Medicaid or children’s health insurance rolls and they are also prohibited from putting in any more administrative barriers in place for new applicants, so these are real resources for health insurance if you qualify.
For more on related topics, visit MyHealthCafe.com:
- Have You Received Your Refund for Your December COBRA Premium?
- Not Eligible for COBRA for Health Insurance? You Might Still be Eligible for Mini-Cobra Health Insurance Continuation.
- If You are Laid Off, Would You be Eligible For COBRA?
- Reminder: Are You Up-To-Date with Your COBRA Payments?
- Healthcare Reform: Pre-existing Conditions and the Federal Health Insurance Pool