December 1, 2009

More bad news for the unemployed – health care subsidies are going away

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rita_hibbardwebIt’s crunch time for millions of unemployed Americans as health insurance subsidies begin to expire this month. That means they will begin to pay the full cost of their health benefits, which in some cases will consume 82 percent of the monthly unemployment benefit for family coverage.

The Obama administration wants to extend the temporary government program that subsidizes the crippling cost of buying health insurance through a former employer’s plan after a layoff. But it’s expected to be rough sledding as the fight to get the Senate health care reform bill passed continues. The outcome of this new battle seeking funding for a massive extended subsidy is uncertain.

The COBRA subsidy was designed to last  no more than nine months, and the program, which began in March, begins to expire today, the Los Angeles Times reports. In addition, it is no longer available for the newly unemployed beginning today.

For those who lose the subsidy, premiums are three times higher than what they’re currently paying.

Legislators in both the House and Senate have submitted proposals to extend the subsidy for six months, but the legislation has not yet cleared major committees nor been amended to fast-moving legislation, as would be required to extend the subsidy without a break.

Experts advise those receiving the subsidy to come up with a contingency plan.

‘Those who are healthy may be able to buy affordable coverage in the individual market, said Sam Gibbs, senior vice president of eHealthInsurance.com. The company, an online insurance broker, says that about half of its customers find family coverage for less than $350 per month and individual coverage for less than $150 per month.

Those with pre-existing health conditions face tough times. They may be unable to get coverage in the individual market, and may be forced to pay the full cost of the COBRA premiums. In states like Washington, coverage through taxpayer-subsidized plans like the Basic Health Plan was capped long ago due to budget cuts, so don’t look for help there.

— Rita Hibbard

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