insure.jpg“The ranks of the uninsured are swelling!” the radio, TV, the Web and newspapers are shrieking today. Many are shocked that the number of uninsured increased to over 50 million last year, according to a Census Bureau report released yesterday.

But it shouldn’t be a total shock. Millions of people are unemployed and have lost their employer-sponsored coverage. It’s not like regular people living on a $300 unemployment check can afford $1,000-plus a month to buy coverage for themselves and their families.

And affording COBRA — the program that lets people buy into their old coverage at a hefty cost — is out of the reach of many who don’t have jobs. It was a bit more affordable thanks to discounts from the federal government, but those have expired for the recently jobless.

Where is the safety net for hard working Americans? There is a pretty frayed one when it comes to coverage for medical care. And things are only getting worse this year.

The Consolidated Omnibus Budget Reconciliation Act, known as COBRA and enacted in 1986, allows workers to remain on health insurance plans offered by their former employers. However, instead of paying a percentage of the premium, you end up having to cough up 100 percent of the cost, plus 2 percent in administrative fees. That can run upwards of $10,000 annually for the average plan, according to the Spencer’s Benefits Reports 2009 COBRA survey, conducted by Wolters Kluwer Law & Business, a human resources research and software company.

Even with a 65 percent COBRA subsidy implemented by the Obama administration in February 2009, the discount has a host of limitations and is still out of reach for many jobless, but experts have said it got more people on the health insurance rolls. Alas, it only applies to people who lost their jobs through May 31 of this year. So, we can expect even more uninsured out there folks.

COBRA has long been plagued with low participation rates, and tough economic times have done little to change that. The Spencer’s poll found that 16.87 percent of employees became eligible for COBRA last year — the highest number eligible since the firm began the survey in 1989 — but only 9.69 percent of those actually signed up for coverage.

Without a discount, it’s pretty clear, few jobless will be able to pay for COBRA.

There is legislation out there now, that would provide yet another extension of these benefits through 2014, when the fruits of healthcare reform will begin to kick in and regular Joes and Janes will be able to buy into more affordable health insurance exchanges.

U.S. Sen. Sherrod Brown (D-OH) introduced a bill in May that would to extend COBRA, and Rep. Susan Davis (D-CA) introduced a similar bill in the House.

“The legislation allows former workers currently enrolled in COBRA to keep their insurance beyond standard eligibility periods until another job that offers coverage is secured or they become eligible to participate in an insurance exchange in 2014,” according to a release from Brown’s office.

It looks like the legislation is stuck in committee. I contacted Sen. Brown’s press secretary Meghan Dubyak, and she said, the senator “continues to remain concerned about families who lose their health insurance when they lose their jobs. He will continue to push for this bill, which enables workers to access COBRA until the exchanges are up and running in 2014.”

For those of you trying to figure out whether COBRA or another plan is right for you, here are some tips that may help:

* It’s a good idea to find out what your COBRA coverage would cost even before you get a pink slip. That way there won’t be a big financial surprise should you lose your job.
* If you can afford it and want to do as little legwork as possible, signing up for COBRA coverage might be your best bet, especially if you think you can get a new job fairly quickly. Remember, even if you do get a job right away, there may be a waiting period at your new employer before the health coverage kicks in.
* For the average worker, COBRA is a better choice than policies available on the open market because you don’t have to pay an agent fee, you don’t have to search for a new policy, and you can keep your existing health care providers, maintained Randall Bovbjerg, senior fellow for the Health Policy Center at The Urban Institute.
* Consider covering just family members who may have preexisting conditions under COBRA. (Note: In order to qualify for the COBRA subsidy, the jobless worker has to be on the plan if he or she wants family members on the policy. This is not the case for traditional COBRA.)
* Look at state-funded plans that may offer discounted coverage for children or for those who can’t get coverage on the open market for whatever reason, advised Maura Carley, president and CEO of advocacy firm Healthcare Navigation. Call your local insurance department to find out what’s available in your state.
* If you’re a freelancer or consultant, you may be able to get a good deal on a policy through a professional association or chamber of commerce plan.
* If COBRA is just too expensive, shop around. Talk to a broker or check out sites such as ehealthinsurance.com, suggested Carley. But she warned: “Consumers are often not savvy enough to see that they might be considering a policy that doesn’t have what they need — good drug coverage, for example. And you also want to make sure that what you’re applying for is medically underwritten.”
* Find out exactly what the COBRA plan covers. Since COBRA plans are basically the policy you had when you were employed, you may get a better deal if you buy an individual policy that excludes coverage you had before. “If you’re a 22-year-old male and not married, you don’t need a maternity benefit,” said Sam Gibbs, senior vice president for eHealthInsurance. Excluding certain items will potentially lower the premium rates on a plan you buy.

Bottom line, we face a huge problem in this country when it comes to covering the workforce with affordable basic health care coverage, and the problem has been brewing for years now. So, let’s not be too surprised when workers are forced to make a choice between food on the table and paying insurance premiums.

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