Health coverage: Coping with COBRA

What will I do for health insurance? When you lose your job it’s one of the first questions that come to mind. The answer is often COBRA, the federal legislation with the bad acronym that can keep you afloat. But, as more people are discovering these days, it is no deal.

Basically, if you get health coverage from a business with 20 or more workers, COBRA allow you to continue that coverage for 18 months (36 months in some cases) if you’re cut from that job. But you shoulder the costs and it’s expensive.

Mary Mulherin, part of Minnesota Public Radio’s Public Insight Network, explained:

“COBRA went to $728 for single coverage so I had to drop it since I’ve been unemployed since last May, don’t qualify for unemployment insurance and just couldn’t afford to pay rent, food AND health insurance.”

Mike Carey sees it from another angle. He’s a human resources director at a large local consulting firm forced to lay people off after pay cuts weren’t enough:

“The people we have let go in the past six months are still unemployed and really struggling. The cost of COBRA is a huge problem for those with families.”

There’s also potential coverage with MinnesotaCare, but as MPR reporter Martin Moylan reported recently, the guidelines for MinnesotaCare are tight:

“For a family of three, for instance, household income can’t exceed about $48,000 a year. Assets, except home and retirement funds, can’t exceed $20,000. Even then, you can’t get covered by MinnesotaCare unless you’ve gone without insurance for at least four months.”

The federal stimulus law provides some COBRA relief, including a 65 percent cut in premiums for up to nine months. But that won’t help people who couldn’t afford COBRA when they got cut and decided to go without coverage.

Notes Mulherin: “…for those of us who couldn’t afford COBRA and are without insurance is this fair???”

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