Staying on the
subject of COBRA…
The program that allows you to continue health coverage after being laid-off has been an important safety net in a system where losing your job, and with it your employer-based health insurance, can easily spiral into a nightmare scenario under the current system. If you can't afford the COBRA continuation insurance—typically more than $1,000 a month for families—or your eligibility runs out, which happens after 18 months for most people, you enter the dreaded individual market. Once you're in the individual market you might be turned down due to preexisting conditions; or if you're older, or a woman, or have had a prior illness, you can be charged much higher rates. You might also end up with
junk insurance that doesn't really cover you when you get ill.
Fortunately,
there are subsidies to help people who have lost their jobs recently pay for COBRA. But what happens to COBRA if Congress passes its health-care reform proposals?
Both the Senate and the House bills would preserve the COBRA program. Under the proposals, those who would want to continue their employer-based coverage after a job loss would pay for it themselves—as they typically have done under current law. Additionally, the House bill would expand COBRA eligibility beyond the current 18 months for people who lose their job from the time of enactment until 2013, when the exchanges begin.
Neither would continue the current program of temporary federal subsidies, however. But once the exchanges are set up in 2013 (under the House plan) or 2014 (under the Senate's) there would be individual insurance policies available through the exchanges that would be similar to employer-based insurance. They wouldn't be able to turn you down for a preexisting condition, or charge you more because of your gender or health status. Moreover, many people who lose their jobs would qualify for subsidies to buy a policy from the exchange. Those subsidies would be based on your income level.
So under the bills you'd be given a choice. Keep your employer-based insurance if you can afford it. Or, buy a policy from the exchange—which would be similar to group coverage offered by a large employer—where you may qualify for a subsidy to help pay for it.
—Kevin McCarthy, associate editor
