Congress is in recess, and – as was expected – the bill that would have extended COBRA was allowed to lapse.  As of June 1st, the federal government will no longer subsidize COBRA premiums.  What does this mean to you, as a health insurance consumer? Read on to learn more.

What is COBRA Coverage?

COBRA is a form of protection for individuals who become unemployed and have their health insurance benefits taken away as a result. It was first introduced in 1986, under the Consolidated Omnibus Reconciliation Act passed during the Reagan administration. Since then, millions of unemployed workers have had the opportunity to retain the coverage that was provided to them by their former employer.

In 2008, when the economy took a nosedive, millions of people became unemployed (the best estimates show that a record 10 million are collecting unemployment insurance and half of the 15.3 milion jobless Americans have been unemployed six months or longer). The newly elected Obama administration stepped up to the plate and added government subsidies to help cover the cost of COBRA through the American Recovery and Reinvestment Act of 2009.

Under the ARRA, COBRA was provided at a 65% discount to the unemployed. What this meant was that a typical COBRA plan (which would have cost a family in California $1,107 a month and 82% of their unemployment check) would have cost only 35% of the actual cost of the plan – or about $390 for a family. The subsidy finally made COBRA affordable for most American families.

What’s Changed about COBRA Subsidy?

As of June 1, 2010, anyone who becomes unemployed will no longer receive subsidized COBRA coverage. This means that you will need to pay the full premium for coverage, which could total more than 3/4th of your unemployment check! Unfortunately, Congress is in a fiscally conservative mood, so you won’t be able to take advantage of any more federal subsidies.

However, the good news is that there are essentially dozens of alternative health insurance options within your reach. The thing most consumers may not realize is that COBRA is priced as group coverage – and it often includes coverage that you may not need as a family. You can take advantage of drastically lower rates simply by opting for a private health insurance alternative. All you have to do is click here to request a free quote!

The Geography of the Congressional Health Care Bill

With a narrow 219 to 212 margin of victory, the landmark health care reform bill (known as the “Health Care and Education Affordability Reconciliation Act”) passed Sunday night. President Obama – along with Vice President Joe Biden – watched the final tally of votes from the White House. Responding, the President said: “We pushed back on the undue influence of special interests. We didn’t give in to mistrust or to cynicism or to fear. Instead, we proved that we are still a people capable of doing big things.”

HR4872 was a revised form of the health care bill passed by Congress on Christmas Eve. It was meant to reconcile some of the reservations that the Senate had with many of the original bill’s provisions. Unfortunately, between Christmas Eve and the vote on Sunday, a spectre of controversy has arisen over the bill, and ultimately, 34 Democrats stood with Republicans to oppose the bill. Representative John Boehner, Republican from Ohio, pledged to vehemently fight the bill: “The American people are angry. This body moves forward against their will. Shame on us,” said Boehner.  Chances are high, however, that the bill will pass the Senate with a simple majority of 51 votes.

(more…)

Note from the Author: Before I even begin addressing this interesting piece of news, I would like to add a disclaimer. I greatly respect that there are a variety of opinions and beliefs in this world, and I am sure that our reader base is about as diverse as diverse can get. I mean, everyone cares about health insurance right? I also respect that not everyone is going to agree with my opinion. I realize that the sensitive and largely disputed topic of same-sex marriage usually involves disturbing some sort of beehive. If you choose not to agree with what is to follow, then I encourage you to post your thoughts in the comments section.

Even if you aren’t a resident of the Golden State, you probably heard all of the controversy and buzz around California’s Prop 8 back in November of 2008. The proposition passed by voters denies the rights of same-sex couples to legally get married. For those of us who believe that marriage should be a right for all people, regardless of their sexual preference, this proposition’s passage was incredibly disappointing. Interestingly enough, however, a federal appeals court in California seems like it is trying to redeem the state’s liberal reputation.

(more…)

Editor’s Preface: The new American Recovery and Reinvestment Act (ARRA) is a revolutionary step in addressing our most vital economic challenges. A significant portion of the money doled out by the ARRA ($59 billion) will go towards immediately addressing the health crisis. This is the second part in a two-part series on subsidies for COBRA in the ARRA. We have also extensively covered this subject in “COBRA Health Coverage in a Bad Economy” and “Stimulus Package and COBRA Health Coverage.” You can find Part 1 of this series at: “COBRA Health Subsidies and the Economic Recovery Act“

COBRA Subsidies and Your Health Insurance

Knowing who is and isn’t qualified for this 65% COBRA subsidy coverage can get a little sticky. The ARRA only provides the subsidy to AEI, or “assistance eligible individuals.” Who qualifies as one of these special AEI’s? Anyone who is eligible for COBRA coverage on or before September 1, 2008 or on or after December 31, 2009. This is an interesting way of looking at things, because wouldn’t it just be simpler to say anyone on or after September 1, since December 31 falls after that date? Moving on. An AEI is also someone who chooses to use COBRA during the original COBRA period, or during a special period of coverage. Just what is a special period of coverage? This special election period begins on the date of enactment of the ARRA and ends 60 days after the person’s health plan administrator provides the required notice to the individual. You also have to be covered by COBRA via an involuntary termination (covered in my last post) by your former employer’s health insurance coverage plan.

(more…)

Where to Go From Here

It may seem like there is no aspect of our country that isn’t an utter mess right now. Big banks are being bailed out, the auto industry is flailing like a car in the river and as we see here, the health care industry is rapidly falling ill to this economic virus. Is there any hope? I feel that there is. We have a new President with new ways of thinking around how health care and insurance should be offered, and while I don’t hang my hat on things changing immensely and immediately after the old administration departs, I do think they are on course to change for the better. How much worse can it get? The road to change has to be one we travel.

(more…)

Health care providers have to have seen this coming. It’s not like we woke up one morning and saw “Hey, the country’s in a recession.” The economic downturn was gradual and glaringly obvious, and people and organizations everywhere did their best to make preparations. However, many states throughout the United States are preparing to make drastic and unprecedented cuts in health care funds, and this couldn’t be coming at a worse time for consumers. The unemployment rate in December was 7.2%, which was up from November’s 6.8%. There doesn’t seem to be a light at the end of the tunnel any time soon (you can’t help but feel bad for the complete mess that Barack Obama is inheriting) and it is important to know how these health care cuts might affect you and your family.

Health Services for Poor First to Go

Obama has been promising since the inception of his campaign that he wanted to extend health care coverage to include more affordable and widely available health insurance to those in lower income brackets. Now, before he has even been sworn in as the next President of the United States, states are already tossing programs like these out the window. Many states have been gung-ho in the fight to expand their coverage for the working poor, but with the state of the economy the way it is, these once hopeful programs are getting the boot. And the working poor are now becoming more steadily just the “poor,” as jobs continued to get slashed across industries.

(more…)