Marcy made note of this the other day, but allow me to put a personal face on the issue.

I lost my job almost exactly a year ago and have been paying COBRA premiums for a family of three ever since. As long as my old company maintains a group plan, I’ll be eligible to stay on COBRA until the spring. COBRA currently lasts a maximum of 18 months.

Coverage, through the odious United Health, is abominable, with mysterious claim denials, indecipherable co-pay calculations, and a high deductible, about which more in a moment. So what else is new? I’ve hardly been the only person around here pointing out that private insurance is a defective product, a soluble umbrella (h/t libbyliberal), etc, etc.

But at least for the last nine months, my version of the defective product has been relatively cheap, thanks to a 65% subsidy on COBRA premiums made available through the Obama stimulus bill. That subsidy only last for nine months, however.

The subsidies went into effect in March 2009 and are available to people involuntarily terminated between September 2008 and the end of this year. For the large bolus of terminees whose subsidy clock started in March, it ends this week.

My premium payment for November was $482.84. The check I just mailed for December: $1379.55. That’s for the privilege of “coverage” with a $5,000 deductible.

(The following weedy paragraph is optional reading.)

The company raised its deductible last spring to lower premiums for itself and its employees. For people it still employs, the company actually reimburses most of the high deductible through a “health reimbursement account,” or HRA. However, ex-employees on COBRA are out of luck. At best, those of us expecting to meet the deductible can pay into the HRA as part of our COBRA, effectively paying into a fund to reimburse ourselves for our high deductibles, and getting a slight break on the total deductible payment by way of an actuarially determined calculation beyond anyone’s capacity to investigate its validity.

I’ll cut to the money shot.

Sherrod Brown has introduced S. 2730 to extend the COBRA subsidies another 6 months. A similar bill, HR 3930, was introduced by Joe Sestak in the House. These bills are not part of current health reform legislation; if you support them, you need to let your Senators and Congressperson know specifically, and soon. (HR 3962 extends COBRA, for those who need it, all the way until the institution of the vaunted insurance Exchanges. The Senate bill put forth by Harry Reid doesn’t address COBRA at all, as far as I know. However, neither bill addresses COBRA subsidies.)

This subsidy has been a momentary lifeline for me and my family, partially offsetting the deficiencies of the “coverage” it helps us preserve. The same is true for heaven knows how many less fortunate families. Extending the subsidies at a time of record joblessness should be a no-brainer for national leaders concerned with the needs of ordinary people. For that very reason, I’m scared to death.

ralphbon

ralphbon

16 Comments