On June 1st of 2010, the decision was made to end the COBRA subsidy, which effectively increased the health insurance payments of all unemployed individuals by 65%. This news, while unfortunate, was just another article I had written. However, a recent development has shown me first hand, just how unaffordable COBRA health insurance is for unemployed persons.
Earlier in 2010, my girlfriend was let go from her job and now her health insurance runs out at the end of the month. Should she want to continue her coverage, the cost is a few pennies shy of $450 a month. Had the subsidy still been in place, the cost would have been south of $200. While at her job, she didn’t have to pay a dime for health insurance so up until last week, this was an absolute blessing. But now, as she begins unemployment filings and the new job search, that number is just ridiculously high to try and pay.
When you consider just how much of a person’s salary that is, realize that with unemployment, the average take home amount is just over $1,000. With rent (or a mortgage) and COBRA insurance, most people would already be out of money and we haven’t even talked about the other necessities in life like food and utilities.
Reading the plights of others online soon made me realize that the $450 price tag is actually quite low compared with what others are paying. In some cases, workers are asked for payments of more than $750 a month on their health insurance and that’s with a $3,000 deductible. So with 21 days left and counting, we’re doing our best to get her checked out for anything and everything. We’ve got appointments lined up day in and day out and God-willing, we can close the month knowing there’s nothing wrong and hold out for a bit until a new job (and a new three-month waiting period) is acquired.
But that may not be an option for everyone. Even though we’re working off of a bad situation, we’ve had a few lucky breaks. The lay-off at the beginning of the month has given us time to take care of a few things that others cannot. And having this health-care has already allowed for a few check-ups and tests so with her being in her 20′s and in good health, the risk of not having health insurance is low. Certainly not a risk I prefer taking but considering the situation, a necessary one.
The primary alternative we now have is to find a health care plan for her on our own, and even though we’ve already decided on the no health care option, I still visited eHealthInsurance.com to see what kind of plans were available. We’ve reviewed their site in the past and actually found a fair amount of plans that were priced at 60% of what the COBRA payments would be. Different providers offered different coverage amounts, copays and deductibles and if we were in dyer need of a health plan, that is certainly the place we would pick it up.
Considering the high price that needs to be paid for COBRA insurance after losing a job, I just can’t see the value in paying it, rather than finding a discount health plan in it’s place. I’m sure there are unique circumstances and previous health conditions that make finding a new policy just as, if not more difficult and costly but for us, the only option is not to pay.