Coverage After Cobra

August 29, 2010 - The Wall Street Journal

Coverage After Cobra

By M.P. MCQUEEN

A growing number of the unemployed are exhausting their extended Cobra health-insurance subsidies, eligibility for which expired at the end of May. There's a slim chance that Congress could extend the 65%, 15-month subsidy again this fall, but most experts think it's unlikely due to mounting concerns about federal spending.

As a result, more unemployed, and workers facing reduced hours and wages, are contacting online providers of health-insurance information about less-costly alternatives.

The subsidy, through a temporary payroll-tax credit for employers, helped make coverage affordable for many unvoluntarily terminated workers to continue under their former employers' group health-insurance plans. Without it, continuing insurance under the Consolidated Omnibus Budget Reconciliation Act generally requires the dismissed worker to pick up the total cost of their premium plus a 2% fee.

Group health-insurance premiums under Cobra average $1,100 per month for family coverage without the subsidy, but $385 with it, says the U.S. Agency for Health Care Research and Quality. The average enrollment rate in Cobra rose to 37% between March 2009 and May 2010, the period when people were eligible for the subsidy. (Workers who lost their jobs starting June 1, 2010, aren't eligible to receive the subsidy, though they still can enroll in Cobra.) In May, Cobra enrollment stood at 33%, says Hewitt Associates, a human-resources consultant.

Helpful Sources

Expanded insurance options under the new health-care overhaul law won't be widely available until 2014. Meanwhile, online providers of information about health-insurance coverage include the Foundation for Health Coverage Education, at coverageforall.org, a nonprofit funded partly by the health-insurance industry, and eHealthInsurance.com , an online brokerage mainly for private, individual insurance.

Cobra-eligible workers can continue to participate in their employers' plans up to the usual 18 months, or longer in some circumstances, once the subsidy ends. But many say they can't afford the full premiums.

Coverageforall.org offers free assistance to consumers in finding free or low-cost public health-insurance programs in all states and the District of Columbia. For instance, many families with a job loss may find their children are eligible to participate in state Children's Health Insurance Programs (SCHIP) for low-income families. The foundation says calls to its helpline at 1-800-234-1317 rose an estimated 59% in August over May; website visitors increased 23%. Calls from people with pre-existing conditions, who often have the most difficulty finding affordable coverage, jumped 68%.

HHS Site

In July, the federal government launched its own health-insurance information portal at HealthCare.gov, which is managed by the U.S. Department of Health and Human Services. The website, which has had more than one million visitors, offers information about public and private insurance providers in all states, including Medicaid, Medicare and veterans' programs. But pricing and benefit data are sketchy. More detailed information will be added in October, according to HHS officials, as well as more information about state and federal high-risk pools for those with pre-existing conditions.

For more information on Cobra go to dol.gov, the website of the U.S. Department of Labor.

Write to M.P. McQueen at mp.mcqueen@wsj.com