Cobra Medical Insurance - The Unkindest Cut of All

COBRA, the Consolidated Omnibus Budget Reconciliation Act; how people need it and resent it at the same time. With people losing their jobs and getting laid off left and right this year, the special provisions of this rule help people basically buy medical insurance from the employers they used to work for, and they lovingly call this COBRA medical insurance in honor of the law passed under Ronald Reagan that makes this possible. Of course it is a provision that helps poor people who aren't old enough to qualify for Medicare, get by in their time of need; but it is also something that reminds people so much of better times; it makes them feel stigmatized to have to use it the way it would if they needed food stamps.

There is this quiet and peaceful elderly couple we know; the husband is closing in on 70, and was laid off from a job as a shelf stocker quite a while ago; he receives his Social Security check, a couple thousand dollars, and is more or less okay. His wife is about seven years younger than him; she was working as a supervisor at a bookstore until recently, and had coverage; but the bookstore chain had to downsize, and she was laid off permanently. She lost her paycheck; she would never have been able to afford her expensive medication for blood pressure and back pain if she wasn't able to apply for COBRA medical insurance, buying it from the bookstore for a couple of hundred dollars every month; and she was grateful. But not anymore. President Obama passed a business stimulus package back in the beginning of the year, and that allows the unemployed and the laid-off to claim deeply subsidized COBRA medical insurance benefits only for nine months. In March, she will need to fork over half of her paycheck to buy coverage, and she only makes about $1000 with her unemployment benefits. They wonder what they're going to live on now.

Why does the COBRA plan insist on sending people to work in this economic climate; how many job opportunities are out there for old people that provide them health benefits over their wages? Does the government just want people to work themselves to death when they are sick? What is more, anyone who gets laid off today, can't even claim the nine months that my friends the old couple got, that is how the new COBRA is framed. Just do the math: most people get unemployment benefits of no more than $1000; and the average COBRA payment lies around $800.

The government does notice that there is a problem here, and they are trying to reform the COBRA medical insurance act. But that is going to take time. What yd ou do if like that elderly couple, your benefits are running out very soon? Well, the first rule of the game is, never to stop making payments for your COBRA medical insurance. When the subsidized rate ends, we won't really be getting any special notice, other than the heftier bill. You just have to find a way to pay it for now. If you stop paying the bill, they will start your count for being with no medical insurance. You get a count of 63 days; if you scrape your money together in under the time, you're safe. If it takes longer than that, then when you come to them for coverage one day, they count you as an all new customer, and you'll have to pay unimaginable premiums like any new insurance customer with all kinds of existing ailments does. When the law passes and makes COBRA medical insurance kinder to people, they'll pay you back for whatever you spent. If you keep asking your COBRA administrator for updates for when your refund will come, you will be notified. One certainly hopes that sense prevails over in Washington.