Risking Financail Devistation Unemployed Dropping Health Coverage

Risking Financail Devistation Unemployed Dropping Health Coverage

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Health insurers recently have been reporting the biggest spike in individual and family health insurance enrollments in over 20 years. The spike is the result of record numbers of cancellations of employee benefit plans.

At the same time, insurance companies offering individual medical coverage cannot hire and train new employees fast enough to keep up with the recent spike in private health insurance enrollments. One insurer stated that they are experiencing the busiest enrollment activity in fifteen years.

Budgeting health insurance premiums into a reduced paycheck can be difficult, at best. Obviously, people need a place to live and food; however, one night in a hospital can end up costing several thousand dollars. This creates a difficult dilemma for those who are unemployed. It has been estimated that for each 1 percentage point increase in the unemployment rate, about 1.1 million are added to the rolls of the uninsured. Additionally, more than 50% of American households have cut back on seeking medical care in the past year because of concerns about the costs, according to a new Kaiser Family Foundation survey. Is there help for people?

Some relief is coming from the new federal economic stimulus package. It provides a 65% temporary subsidy to unemployed people. 1 of last year through the end of this year. But a problem for many is that COBRA can be prohibitively expensive. Under law, workers must pay the entire premium, plus a 2 percent administration charge. On COBRA, family coverage averages $13,000 a year. Even with the 65% subsidy, it may not even be an option for someone who is out of work. In many cases, private medical insurance offers a significant savings over a subsidized COBRA option.

Since President Obama signed into law the $787 billion economic recovery effort last month, employers, laid-off workers, state officials and benefits attorneys have been scrambling to figure out the details of the very broad provisions that are designed to help the growing number of jobless workers continue health coverage. There is a great deal of confusion regarding the stimulus package. Generating a lot of heat at the moment is the fact that to qualify for the subsidy, you must have lost your job between Sept. 1, 2008, and Dec. 31, 2009. People who lost their jobs earlier have been excluded. The limitations appear to be a concession to limit the overall cost of the subsidy program.

The stimulus package was released so quickly; Unsurprisingly there are more with questions than answers. Over the coming weeks, the U.S. Department of Labor is expected to release further clarification. Additional guidance is also expected from Health and Human Services as well as the Treasury Department.

In the meantime, if you aren't eligible for the new subsidy, there could be another way to subsidize COBRA coverage. If you lost your job because of competition from exports or overseas outsourcing, the government will pay up to 80 percent of COBRA premiums through the Trade Adjustment Assistance Reform Act. Under this law, you can receive monthly payments or a year-end tax credit to offset COBRA premiums for up to three years". The subsidy already was available before the stimulus bill passed, but the new law boosts the subsidy rate from 65 percent to 80 percent.

If you're not eligible for any COBRA subsidies, look into other plans as a COBRA alternative. Can you get onto a spouse's employer-based health plan? Can your state insurance department or county health department tell you about any state or local programs to provide affordable medical coverage? Veteran's benefits may also be an option.

If none of these avenues work for you, look for an individual health insurance plan. It is possible to find lower premiums than those available on COBRA.

About the Author:
BestHealthcareRates.com has helped thousands find affordable medical insurance plans and COBRA alternatives, getting the most benefits possible from their dental and medical insurance coverage. The company is committed to exceptional service and strives to achieve 100% customer satisfaction and affordable health insurance for all. For more information on COBRA alternatives and health insurance comparisons, visit www.BestHealthcareRates.com



Article Originally Published On: http://www.articlesnatch.com


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