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January 14, 2009
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The Consolidated Omnibus Budget Reconciliation Act of 1985, now known as COBRA, contains a clause allowing employees to keep their company's health insurance for up to 18 months after they leave their jobs, provided they pay the premiums.
With people being laid off right and left and the ranks of the unemployed rapidly swelling, many Americans are getting their first introduction to COBRA--and they don't like it. It ain't cheap; it's the whole enchilada, not just the small portion of the premium they may have paid at work.
In nine states, monthly unemployment benefits barely cover or don't cover the premium for COBRA. They are Alabama, Alaska, Arizona, Delaware, Florida, Louisiana, Mississippi, South Carolina and West Virginia.
Nationally, COBRA costs on average gobble up 84 percent of monthly unemployment checks for families (more than 30 percent for individuals). Factor out the nine states already mentioned, and the average is still 75 percent for the remaining 41 states for family coverage.
Now, I know what many people are going to conclude from these stats--nationalize health care! Granted, that would start to alleviate the situation, but under none of the proposals now floating in Washington, D.C., would the individual or his or her employer not have to pay (substantially) for the "right" to health insurance.
And if the system works anything like the health care delivery platforms in Canada and France, for instance, you'd have to buy supplemental insurance to cover things like, well, operations beyond the tonsil removal variety--to say nothing of enduring long waits for doctor visits, tests and hospitalization, sometimes stretching out to months and even years in Canada.
"We've got to cut your tumor out immediately, Bob, or you'll not make it another six months," the Canadian doctor explains.
"Great, let's get it done," Bob replies quite naturally.
Doctor: "Unfortunately, there are no hospital openings for 18 months."
That kind of thing.
The one time I got laid off, I received the COBRA notice in the mail and immediately knew I couldn't pay the premium. It was just under $2,000 a month for my family. I could pay the premium and lose my house or stay in my house and worry about everyone's health needs. I stayed in the house, and fortunately nothing happened. (However, I did learn how to buy my medications from Canada, which in many cases is still cheaper than paying the co-pay here!)
That's why I compare COBRA to the snake of the same name--it'll bite you.
Maybe those long lines and waits are better, but I'm hoping there's a still better solution.
