COBRA Bites!

Part of the recently enacted stimulus bill says the government will pay up to 65% of the cost of health insurance from former employers for some unemployed Americans. But for some families that help was too late…

“That was my main concern… my children. God forbid they break a leg, they break an arm. You have to have coverage. It’s just not worth taking the risk.”
-Lisa Merkin, Laid Off

Insurance-wise, Lisa Merkin’s layoff a few month’s back couldn’t have come at a worse time. She was expecting her fifth child and had no health insurance. She could have kept her former employer’s coverage…until she learned why they call it COBRA.

“It bites you, just like a snake! I could have COBRA’d the insurance, but it would have cost me a thousand dollars to COBRA for the children. If I went on to my husband’s insurance, it would have cost us $1,500 a month.”
-Lisa Merkin

Now, thanks to the stimulus bill, Uncle Sam will pay up to 65% of COBRA. But that’s no help to Lisa.

“That wont help me. It will only help the people who get laid off from I believe it’s March 18th on. It won’t help people that have already been laid off and as you know there are 10s of thousands of people who have been laid off.”
-Lisa Merkin

But this story isn’t an unhappy one. Because when Lisa found out what COBRA costs, she got online and found a policy that provided major medical for a fraction of that price.

“If I had stayed with Cobra I would have paid about $1200. Finding insurance on my own, very similar insurance other than the deductible I paid $400, and that includes dental.”
-Lisa Merkin

So Lisa accomplished the same thing with smart shopping that Uncle Sam offered: about 2/3s off the COBRA bill.

Granted, her policy isn’t as good… she has to pay the first $5,000. But it’s a lot better than nothing. And something to keep in mind if you’re out of work, run out of government assistance, or otherwise find that COBRA bites.