individual health insurance

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Window closing on COBRA subsidy?

The most recent iteration of the current jobs bill being considered by the Senate has stripped out a second extension of the 65% COBRA subsidy for certain laid-off workers, according to the Christian Science Monitor (2/11).

With Congress back in session this week, we should get an idea of whether the subsidy will be added back in, considered in a different bill, or allowed to expire on March 1.

California workers at smaller companies who qualify for Cal-Cobra, not COBRA, may also eligible for the subsidy if they are involuntarily terminated before March 1.  You can find detailed information from the Department of Managed Healthcare.

Employees terminated in December will not be eligible for COBRA subsidy

The U.S. Department of Labor has provided clarification to the eligibility guidelines for the 65% COBRA under the current ARRA legislation.

Because employees of California small groups are typically covered through the end of the month in which they are terminated, they are not eligible for COBRA (or Cal-Cobra) until the first day of the following month.  For December terminations, that means January 1, 2010 — one day after the eligibility period for the subsidy expires.

The DOL points out that this is based on current legislation.  There is a pending bill in the Senate as well as a House counterpart, both of which would extend the eligibility period, and the length of the subsidy for new and current beneficiaries of the subsidy.

12/22/2009 UPDATE: President Obama has signed a bill extending the COBRA subsidy.  The eligibility period for laid-off employees is extended two months, to February 28, 2010.  The benefit period is extended six months (to a maximum of 15 total).  The extended benefit period applies to the newly qualified and to those who have been receiving the subsidy under the original legislation.  Story here, from the WSJ.

Is Health Care Reform DOA?

As the Senate began debate this week, several issues of timing are coming to the forefront:

  1. Will health care reform pass before the end of 2009?  This seems extraordinarily unlikely.  With the number of potential amendments and a reconciliation of the House and Senate bills (assuming Senate passage) necessary before sending a final bill to the President, Congress looks far more likely to go home for the holidays with additional work to do.  The clip below from provides more insight.
  2. Will health care reform pass in 2010?  The closer we get to November 2010 elections, the harder it will be for some moderate Democrats to vote for this bill.  A heavily amended bill still seems very possible, if not likely, but several moderate Democrats and perhaps a Republican like Senator Olympia Snowe, will wield great influence in the final version.
  3. When we will see change?  Assuming a final bill does pass, those hoping for a quick fix are likely to be disappointed.  There may be a good three to four years of preparation (and collecting of taxes to pay for the reforms) before you see anything different with your current health insurance.

COBRA and Cal-Cobra subsidies set to expire

If Congress doesn’t vote to extend the federal subsidy for COBRA and state continuation coverage (Cal-Cobra in California), many unemployed individuals and families will soon find the cost of their health insurance going up by about 300%.

The detailed story, here.

Insurance carriers have administered this subsidy for small employers subject to Cal-Cobra (2-19 employees), but businesses with 20+ employees will want to pay close attention to what Congress does.

Pharmaceutical companies raising prices – is the Senate the only group that didn’t see this coming?

You might remember headlines from this summer, where Big Pharma generously offered to kick in about 80 billion dollars to help pay for health care reform. It isn’t too hard to follow the money trail and figure out who is actually paying for that: mostly consumers of brand-name drugs.

Health insurance plans – for individuals and small businesses – that exclude brand-name Rx coverage continue to increase in popularity and are increasingly more affordable than their brand Rx-inclusive counterparts.