When employees suddenly find themselves caught up in the whirlwind of mass layoffs, not only will they sustain financial and economic hardships, they will also be faced with losing their health benefits. Furthermore, this concern is compounded if the employee or dependents have health issues that require continual medications and medical intervention.
COBRA or Daily Survival?
COBRA is the acronym for Consolidated Omnibus Budget Reconciliation Act. This governmental benefit gives unemployed workers and their families the right to continue their former employers group health benefits, but the full cost of the premiums are to be paid by the uninsured.
In February 2009, U.S. President Obama signed a stimulus bill that subsidized 65% of COBRA premiums for laid off workers up to a maximum of 15 months. Unfortunately, this subsidy ended on June 1, 2010 and premiums for unsubsidized COBRA benefits have risen far beyond the affordability of the unemployed. Families USA, a healthcare consumer advocacy group, estimates the average monthly COBRA premium to be $1,107, while the average unemployment check to be $1,313.
How does an unemployed person pay the rent or mortgage, pay basic utilities, and purchase food for the family on the remaining $206? No matter how frugal one can be, the basic necessary essentials for survivability cannot be met on such a meager budget. Let’s throw a wrench in this scenario and include pre-existing health conditions. It is nearly impossible to obtain individual health insurance for consumers who are afflicted with medical issues, because insurance companies cannot make a profit from individuals who have health problems. After all, they are for-profit entities and it always boils down to the mighty dollar and their healthy financial bottom line.
Less Desirable, but Affordable Options
No one wants to resort to state social service programs such as food stamps, cash-aid, and medi-cal; or to stand in line at food kitchens, homeless shelters, and food pantries. The processes of most state social service programs are long and tedious. Applicants are required to fully complete page upon page of questionnaires, provide supporting documents to substantiate the loss of income and recurring monthly bills, and go through interviews with social service technicians who pull apart every aspect of the applicants' life to see if the applicant is poor enough to need help.
The applicant is required to divulge any and all bank accounts, any cash in the home or in their wallets, how many vehicles are in the household, who owns the domicile where the applicant resides, and numerous other probing questions. Complete and total disclosure is required. But, if they find that there is one too many cars owned, or the maximum cash allowed is exceeded by just $1.00, or the applicant just does not fall within the pre-determined narrow mold which they call their set of guidelines, they will not hesitate to deny any assistance.
If the applicant qualifies for this assistance, the state will provide tax payer funded medical insurance, tax payer-funded food coupons, and cash assistance. But again, a monthly disclosure of any changes that may have occurred within that month will be required before additional assistance will be approved.
Another option for obtaining medical insurance is to seek individual health insurance coverage through direct writing insurance companies. This is usually far less costly than COBRA, but overall coverage is far more limited, and deductibles and co-pay costs are higher than employee sponsored group insurance. Furthermore, there are no guarantees that the insurance company will accept the applicant or the applicants' dependents.
The previously mentioned health care reform law does provide insurance applicants long awaited additional protections from gouging insurance companies denying or cancelling health coverage for consumers with pre-existing health conditions. Unfortunately, this part of the law does not go into effect until 2014.
Although there are safety nets for consumers who find themselves in financial hardships, the processes to obtain or secure these benefits are long, confusing, and at times, ridiculously costly. The unemployed will need to weigh their options very carefully. But know that if it is decided that health insurance will need to be foregone, hospitals are sympathetic to the plight of patients who are unable to afford medical assistance and are more than willing to accept interest-free long-term payment plans and to forego certain incidental charges in order to have the patient seek medical help when needed, rather than to not seek the help and compromise the health of the patient and/or family.
Sources
Families USA, The Voice for Health Care Consumers
"Health insurance options for unemployed beyond COBRA", Sandra Block, Your Money, USA Today, June 7, 2010.
Lynn Murphy - Writing has always been my passion. It's an opportunity to express my thoughts, feelings, and opinions; and to educate and provide facts ...
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