Law allows laid-off workers to continue health insurance

By Alison Knezevich
Staff writer

After a layoff, losing your health care can be just as scary as losing your paycheck.

A federal law called the Consolidated Omnibus Budget Reconciliation Act (COBRA) allows certain workers to continue insurance coverage they had under their employers. COBRA lasts 18 to 36 months, depending on the person's circumstances.

But a report released last month by the consumer health organization Families USA found that nationwide, the average COBRA premium is out of reach for many unemployed people.

In West Virginia, the average unemployed worker must spend more than 40 percent of an unemployment check on COBRA premiums for individual coverage, according to the report. And for family coverage, the typical West Virginian's monthly unemployment benefits wouldn't even cover his or her COBRA premium.

If you lose your job, first check to see whether you can get coverage on a spouse's or family member's plan, said Cheryl Fish-Parcham, deputy director of health policy at Families USA.

"That's a great alternative if it's available," she said. "But of course for a lot of people, that isn't available."

Second, look into whether your family qualifies for the Children's Health Insurance Program, Medicaid or other public programs, she said.

Insurance through the individual market is also an option, but it can be risky and the premiums are often very expensive, Fish-Parcham said.

"People should be very cautious about buying individual insurance," she said. "It's better than nothing, but they need to be really conscious and aware that they may be rejected for coverage."

Unfortunately, even though COBRA premiums are unaffordable for many, you shouldn't drop it until you have other coverage, Fish-Parcham said.

COBRA premiums can cost people up to four times what they were paying during employment, said Ellen Laden, spokeswoman for UnitedHealthcare's Golden Rule Insurance Co. Employers usually pay at least 75 percent of workers' premiums.

If you have a chronic illness or condition that would prevent you from getting coverage, it's important to exhaust your COBRA benefits, Laden said. If you don't choose COBRA, you'll void your eligibility for provisions of the Health Insurance Portability & Accountability Act that ensure people with such conditions continue getting health coverage.

If you decide to enter the market, there's a broad range of options, Laden said.

Short-term insurance is temporary coverage designed for people whose lives are "in transition," like someone in between jobs or a recent college graduate, Laden said. The plans last one to six months. They can be dropped at any time without penalty, and people can reapply after the plan is up, she said.

For longer-term coverage, there are a variety of renewable health plans, Laden said. For instance, lower cost high-deductible plans, where the consumer pays for minor or routine expenses if they come up. Traditional plans are more similar to employer plans, where
the consumer has a co-payment for routine health-care expenses.

No one should go without insurance, whether they opt for COBRA or other coverage, experts say.

"Certainly it's tempting at a time when your budget is tight and you don't have a steady income every month," Laden said. "But that is the time that . . . bills can really add up and send you into medical bankruptcy."

Tips for looking for plans in the individual market

• Make sure you are doing business with a reputable company. Check independent rating agencies like A.M. Best or Standard and Poor's.
• Choose the type of health plan that meets your family's needs. Do you visit the doctor often? Do you take a lot of prescription drugs? Are you willing to assume the cost of some lower cost routine health care in exchange for reduced premiums? Are tax breaks important?
• Take a look at high deductible and health savings account (HSA) plans. Both can help you save on your health insurance premiums (the higher the deductible, the lower the premium) and HSA plans also offer tax advantages.
• Make sure your health insurer has a strong network of doctors and hospitals that you can use, even if you have to relocate. Are your current doctors in the network and are you willing to change if they are not? Network discounts can often result in substantial savings on your health care expenses.
• Understand the plan you are buying, what it covers and what it doesn't. Know the bottom line and what you are responsible for paying.

SOURCE: UNITEDHEALTHCARE'S GOLDEN
RULE INSURANCE COMPANY
Reach Alison Knezevich at al isonk@wvgazette.com or 304-348-1240.