Unemployed? The Cost of Health Insurance Could Be Getting Cheaper
If there’s a single On the Money mantra that rises above all others, it’s that nothing is more valuable than your health. That’s why Carmen always urges people facing a job loss to think first and foremost about how to maintain their health insurance coverage, no matter what the cost. Insurance may be expensive but it is nothing compared to the cost of health care if you’re unlucky enough to be stricken while uninsured.
A popular way for people to stay insured in the event of a job loss is through COBRA. The government-sponsored program acts as a safety net by allowing you to maintain coverage for 18 months after losing your job (or leaving on your own accord). The catch? It’s expensive.
COBRA costs the average person about $500 each month in premiums and fees. But a provision in the American Recovery and Reinvestment Act signed into law by President Obama last week might prove to be welcome medicine to the millions of unemployed Americans who cannot afford COBRA in its current state. The stimulus package now stipulates that the government will subsidize COBRA premiums up to 65% for the first nine months of coverage. You qualify if you lost (or will lose) your job between Sep. 1, 2008 and Dec. 31, 2009. If you are unemployed but did not sign up for COBRA, you now have an additional 60 days from last week to do so. The subsidy will not be available for individuals who earn more than $125,000 or households that earn more than a $250,000.
Click hereto find out more information about whether COBRA is right for you under the new guidelines. The Qvisory COBRA information center lets you compare different plans and find out how much the government will cover.
But even with the government subsides, COBRA may not be for everyone. Private plans can still be cheaper, but the benefits they provide are, in general, substantially fewer. Compare the benefits between COBRA and private coverage to deem what is right for your needs. The one thing that’s true for everyone is this: you need to stay insured even if you are unemployed. For many individuals, it just got a little easier with the COBRA subsidy, which will take effect March 1.