Coping Without COBRA

June 1, 2010 | By More

The federal COBRA subsidy that helped make health insurance affordable for millions of laid-off workers and their families is beginning to expire for its first recipients on June 1, 2010. The subsidy was first made available in March 2009 and was designed to cover 65 percent of the cost of COBRA health insurance for up to 15 months.

The end of the federal COBRA subsidy could affect millions of Americans. Between September 2008 and March 2009 alone (the period during which the first to lose their subsidies originally lost their jobs), over 3 million Americans were added to the numbers of the unemployed. Many of these, along with their dependent spouses and children, enrolled in COBRA and benefited from the subsidy.

Some of those rolling off the subsidy may be able to continue their COBRA coverage for three additional months, though their costs will increase substantially. Those who can’t afford COBRA without the subsidy will be forced to seek more affordable alternatives immediately or risk going uninsured.

Here are three tips to help consumers navigate their health insurance options after COBRA:

Buy your own health plan–Beginning in 2010, health reform makes it safer to buy your own coverage. Your insurance policy can no longer be canceled just because you get sick, and insurance companies can no longer limit the total amount they pay toward your medical care. Plus, individual and family policies will be required to cover the cost of preventive screenings at no additional out-of-pocket cost to you. It’s still possible to be turned down for medical reasons, so work with a licensed agent such as to learn more.

Turn entrepreneur and get a break–Many of today’s unemployed earn supplemental income by consulting or running a small business. If you’re one of them, you may qualify for a small group health insurance plan. You can’t be turned down for group coverage based on medical history, and beginning this year, qualifying business owners will get a tax credit for 35 percent of their health insurance premiums. Talk to a licensed agent or accountant to understand how the rules apply to you.

Know your last options
–Persons who can’t afford their own coverage or who have pre-existing medical conditions should contact the nonprofit Foundation for Health Coverage Education for help at (800) 234-1317. To learn more about your health insurance options after COBRA, visit

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