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COBRA insurance too expensive for most people

Posted January 22, 2009
Updated March 9, 2009

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— During a weak economy, most of us have at least thought about what would happen if we lost our jobs. But chances are, we have not thought much about the cost of losing our health insurance.

Most of us who have benefits from our employers probably don't pay much attention to how much health care really costs. However, if you lose your job you will likely quickly become aware of COBRA.

What is COBRA? What is COBRA?

By law, employers with 20 or more employees must offer COBRA continuation health coverage. It allows former employees to keep health insurance benefits for up to 18 months. However, the employee has to pay the full premium, plus 2 percent.

“All I can do is just kind of give people information about what they're in store for. And it's not a good picture,” said Bob Harvell, with the North Carolina Department of Insurance.

The monthly premium for an average-size family in North Carolina is $1,028. That is more than 82 percent of the average monthly unemployment benefit. Harvell says most people simply can't afford COBRA.

“If they're still paying mortgages and car payments and things like that, and all of a sudden here comes the bill for the health insurance that they've got to pay on their own, that the employer used to pay, yeah, that's a real eye-opener and most of them will say, 'We can't do that,'” Harvell said.

Unfortunately, there aren't many other options. Depending on your age and health, you might be able to get a less-expensive individual private health insurance policy. Opting for less coverage can save some money as well, but many people still can't handle the cost, so they go without health insurance.

“If you can't afford to purchase insurance, the only government-sponsored program we have is the Medicaid system. And you and I both know that most people don't qualify under the guidelines of Medicaid,” Harvell said.

Medicaid serves low-income parents, children, seniors and people with disabilities.

If you don't qualify for Medicaid and can't afford COBRA, there aren't many options, and these days a lot of people are looking for health care alternatives, Harvell says.

"And some even weep over the phone because of the seriousness of what they are looking at to pay," he said.

The solution most people hope for is to quickly find another job. They know that if they have a medical emergency, or just need a doctor's basic care, they can probably only afford it if they are covered by health insurance.

A new option, Inclusive Health, also known as the North Carolina Health Insurance Risk Pool (NCHIRP), began Jan. 1. It's for people with pre-existing conditions, people who finished their 18 months of COBRA, and people who can't get COBRA. Premiums range from $200 to $1,500 a month depending on age, gender and smoking status.

To learn more about NCHIRP, visit the Web site's frequently asked questions section or call 866-665-2117.

The name COBRA, by the way, is a bit odd. It has nothing to do with health or snakes. It comes from Consolidated Omnibus Budget Reconciliation Act, a 1986 federal spending bill into which the health insurance requirement was inserted as a way to be sure it would pass Congress.


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  • NC-writer Jan 29, 2009

    Bechtellaw -- I know one of the guidelines says you have to have used up your COBRA before you're eligible...but in the list of things that make a person eligible for Inclusive Health it says: "You have similar coverage, but at a single rate higher than Inclusive Health." So those two things seem to contradict each other to me, because you do have similar coverage but it's more expensive even though it is COBRA. Please give them a call to talk to them, don't just read the website. I talked with 2 different people when I was lining it up for my husband and they were SO friendly and said they're interested in doing whatever they can to help people get people signed up for the plan. They're very helpful and very nice. You really should talk to them and see if they can give you some answers about your options. The number is (866) 665-2117. God bless you--hope this helps, and hope they can help you!

  • Bechtellaw Jan 28, 2009

    I did look into that insurance and correct me if I am wrong ...it stated I could not apply for it until I had used up my 18 months on COBRA?
    I don't qualify for Medicaid and I can't get that ...any more suggestions would be helpful.

  • NC-writer Jan 27, 2009

    bechtellaw2 said: "My husband lost his job and we are unable to qualify for any type of new insurance because he has diabetes and my daughter has asthma."

    I strongly urge you to look into Inclusive Health (link is given in the article). It's specifically designed for people with pre-existing conditions, and it's affordable, good insurance. My husband has a condition that makes him either uninsurable or very high premiums (Blue Cross quoted him $1600/month!) but through Inclusive Health hispremium is $528/month for great insurance, prescription drugs are $10/20, and the premium would be even lower with a higher deductible. Inclusive Health just started their program and 1/1/09, and it's a godsend for people with very few options for insurance. Your situation sounds really heartbreaking--I hope you look into it.

  • NeverSurrender Jan 27, 2009

    "It's easy to get by this. I know of a technology company in Charlotte with a location in Raleigh that doesn't allow you to sign up for company provided insurance until the end of your 90 day probationary period."


    Health insurance is not a mandated employee benefit so the employer is perfectly within their rights under HIPAA to have a probationary period. However, HIPAA also mandates that the waiting period and exclusionary period (up to the 12 month maximum) run concurrently so the employer would only be able to impose a maximum nine month preexisting condition exclusionary period in this instance.

    The employee would need to purchase COBRA continuation coverage or an individual policy to bridge the 90-day gap to ensure that the 63-day "significant break in coverage" does not occur.

    Does that suck? Having paid COBRA for six months and had nothing to show for it...yep...it sucks royally. But them's the rules unless someone decides to change them.

  • greentara Jan 26, 2009

    I always thought a cobra was a poisonous snake.... hmmmmm.

  • elyhim2 Jan 26, 2009

    I'd like to see base care goverment insurance. There is no way that the government healthcare would cost the 1000$ a month that me and the company now pay. It's over 12k a year for the one or two doctor visits we need, plus copays and what not! even if the government DOUBLED my taxes to provide national healthcare it wouldn't come to 12k a year. I am not at all worried about the big boogieman that people raise about the government deciding what's best. Look around the government is behind preventative care and if you just want someone to provide the valium's or percocets your used to asking for then buy extra insurance for your personal quack.
    The US simply cannot compete with national healthcare in other places and as for providing the BEST healthcare? Think again, try googling what nation's are the healthiest nations and you'll be suprised.

  • Angry Independent Jan 26, 2009

    wcnc you have been out of the loop for a while.

    Because of the bizarre nature of the coverage laws, "uninsurable" people MUST be covered via workplace coverage plans, but individual coverage plans have no such requirement. You can be left out in the cold and refused coverage regardless of how much you want to pay. It can be a condition you were born with that could not possibly have prevented, or it could be a lifestyle ailment, it does not matter to the insurance company.

    The cost of US medical care is the most expensive in the world, by a factor of 2, to the next closest nation, and is rated 37th in quality by the world health organization.

    Sure there are canadians who don't want to wait their turn for healthcare and come here. But there are far more americans who forced to travel overseas to have medical procedures done that are criminally expensive here.

    see http://www.businessweek.com/globalbiz/content/nov2008/gb2008119_571910.htm

    Overall our healthcare system needs work

  • textilesdiva Jan 26, 2009

    Not, not everyone can buy directly from the insurance company. Insurance companies can and do deny coverage to people. If you're young, don't smoke, aren't overweight, and are healthy, yes, it's a reasonable assumption that you can buy your insurance from the insurance company, and sometimes at a decent rate.

    Re-read the article: under COBRA, the employee is responsible for the full premium of their health insurance, when they hadn't been before. Health insurance is called a benefit because your employer is subsidizing part of the cost of your premiums (or, for some lucky folks, all of it).

    But not everyone is young and healthy. So, no, it's not as simple as going to BCBSNC and saying "yes, I'd like to buy some health insurance, please".

  • wcnc Jan 26, 2009

    Before people go on about how wonderful the Canadian National Healthcare is, keep in mind that there are still quite a few Canadians who travel to the US and pay completely out of pocket for medical care....That tells me that their healthcare stinks!!!

    Like it or not, the US still has the best medical system in the world.....People from most other countries come here for medical care when they find they can't get the same level of care where they live....

  • wcnc Jan 26, 2009

    Can't people just sign up for BCBS on their website and pay much less than the COBRA amount??