Unemployed and Can't Afford COBRA? Options!
Unemployment and COBRA
There's been a lot of buzz about flaws in the healthcare system for years. I could go on and on about flaws in many "systems", but will try to stay focused on healthcare for now.
In today's economy, unemployment is approaching that of the Carter era. One of the greatest benefits to working for a company is healthcare coverage, right? Employers qualify for group rates and while the companies that fully cover you without a co-pay are now a "major minority", co-pay of premiums by employees is on the rise, and FAST. That's bad enough.
What happens when one loses his/her job? People end up out of work for many reasons: some quit, some get fired for good cause; some get fired for wrongful cause; some businesses lay off employees due to lack of profits; some businesses simply close.
So you were a highly-paid employee that lost your job. The maximum benefit Unemployment Insurance will pay is $475.00 per week. You've certainly paid into the system all the years you've been employed, but is it enough to survive on while you're looking for another job? What if there are 300 people applying for each and every job out there? With today's economy and the high level of unemployment, this figure is not far-fetched. It's not like you can just go out and get another job in a reasonable amount of time. Even if you did, medical insurance may not be available to you until after you've worked at least three months.
Most people have to pay rent or a mortgage, property taxes, food, gas, insurance, electricity, phone, and so forth. All of this must be paid on the unemployment benefit of $475 per week. COBRA medical insurance for my daughter and me would cost me $650.00 each month. How am I supposed to afford that?
To qualify for unemployment insurance, one must meet the criteria of not being personally responsible for losing one's job. However, the responsibility of paying for healthcare coverage now becomes a serious issue for the unemployed. I honestly feel that the employers responsible for displacing individuals should carry some of the load regarding health care. President Obama obviously felt the same way!
Effective March 1, 2009 President Obama signed into law a stimulus bill including new COBRA provisions! A terminated employee must now be notified of this COBRA premium subsidy program. It's designed for the unemployed to pay only 35% of the premium. The employer has to pay the remaining 65% and will receive tax credits. READ all about it here: http://ben.omb.delaware.gov/benrep/documents/cobra_stimulus_changes_022009.pdf
Since I lost my job prior to Obama's provisions stated in the above paragraph, I checked many of the reduced cost health programs. What did they ask for? They ask for the previous year's tax information. Well, last year's income is irrelevant! It's gone! What about now? What about today? What about the next few months? The answer is the majority of people collecting unemployment can't afford to be covered at all.
Then there are the other health plan companies that come flooding into your email and mailbox. Wow, I could get medical coverage for half the cost? Come to find out, one must be employed to get coverage. AND...if you had a pre-existing condition (let's say you had a melanoma removed ~ very common in California), you are disqualified. So, you want to just get medical coverage for your child. You CAN'T, unless YOU also have medical insurance with that company! God! The loopholes!
THERE ARE ANSWERS!
First of all, let me state that this information applies to California residents; however, those living outside of California may at least get a lead on checking for similar programs in your State.
Let's say you were with Kaiser when you lost your job. In my case, I paid a $50 co-pay for a test scheduled three days after my coverage ceased. I put off paying for COBRA, as you can wait up to 63 days, and expected I would back-pay the premium with my family's financial help, IF I got a bill. I still hadn't received a bill by 63 days later and didn't expect one. Four months later I finally received the bill for $3,180.00! Still being unemployed, I could not afford to pay this bill. Thankfully, on the back of the bill was information about Kaiser's MFAP (Medical Finance Assistance Program). You can look them up online to get the applicable paperwork here: https://members.kaiserpermanente.org/kpweb/search/global.do?queryText=medical+finance+assistance. They only ask for your year-to-date paystubs (in this case, your unemployment) and proof of any other taxable income (you don't have to report non-taxable income such as child support). The good thing is last year's income doesn't matter. They don't ask. Simply fill out the paperwork and send it in. In my case, Kaiser did indeed cover the entire bill and even gave my daughter one month of free medical coverage!
Another option is to check with your County's Dept. of Social Services for a County plan. I did, but because I have a child I did not qualify! It doesn't even matter if your child is covered under another plan! LOOPHOLES again! But, if you're single, this is the way to go. While there, you will most likely be given Medi-Cal forms.
You might wonder whether you qualify for Medi-Cal: http://www.dhcs.ca.gov/services/medi-cal/Pages/Medi-CalEligibility.aspx and http://www.cahealthadvocates.org/low-income/medi-cal.html#qualify. If you're collecting unemployment of $475 p/week for a family of two or have assets above what is allowed, you don't qualify. In this case, Healthy Families is the only option to cover your minor child: http://www.healthy-families.us/. When applying for Healthy Families, however, you will need to report non-taxable income such as child support as well. My child was able to get medical, dental and vision for just $24.00 p/month! Because your child(ren) is/are covered for an entire year, you don't need to notify Healthy Families should you become employed again during that year. Keep the coverage for the entire year because there's no guarantee you won't lose that job the way the economy is going.
So, since all else failed for getting reduced-cost health coverage for me, my family told me to get whatever insurance I could (with their help). I applied for regular Kaiser health insurance and was denied due to pre-existing conditions! However, on the back of the denial letter, there is a phone number to the California Major Risk Medical Insurance Program. I expected the premium would be outrageous, but was very surprised it was less than $500 p/mo. for Kaiser individual coverage (since my daughter is covered by Healthy Families), with a $500 deductible before insurance co-pays kick in. Their application must be downloaded from their website, and is not a health questionnaire. It takes about 10 minutes to fill out. You must include your denial letter and answer a few questions. They also fill up fast with the number of applicants they can approve, so make sure you take action ASAP to contact them and apply. There may be a waiting period, but getting health coverage is important, so better later than never!
There is help! Take the steps needed to get medical coverage right away, as some of these programs require you apply within a specified time period of losing your previous coverage, or they simply can only accept a certain number of applicants. I hope this information is helpful!!