The Recent Stimulus Package and COBRA Coverage

It was in 1986 that President Ronald Reagan first signed that bill that is known today as COBRA. COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, originally included much more than health care provisions, but today -- for many -- its name is synonymous with: "expensive health coverage after you leave your employer."

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A COBRA Stimulus Package in an Economic Crisis

America has come a long way since those auspicious beginnings. COBRA is becoming a buzzword all-too-often heard (unfortunately) by those among us who have lost our jobs in the economic crisis. The 44th President, Barack Obama, has taken bold new steps in helping turn around the economy. Facing unprecedented unemployment losses – the greatest and quickest fall in stock value since the Great Depression – the President signed into law the American Recovery and Reinvestment Act (ARRA), a massive government stimulus package that includes a small section about COBRA health insurance. In fact, all told, the ARRA includes $59 billion in immediate health care spending.

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What does the Stimulus Package Mean to You and COBRA?

What does the new law mean to you and your health coverage? If you were recently laid off, then you could receive significant benefits from the COBRA stimulus plan. However, if you were encouraged to retire, quit, or take a severance offer, then you probably can't take advantage of the COBRA subsidy.

 

COBRA's Burden
   Unemployment Check

  Average Premium

  Monthly Share of Unemployment Check
 Family

  $1,278

 $1,069

 83.60%
 Individual

  $1,278

 $388

 30.40%

Data from the 2009 Study by Families USA, "Squeezed: Caught Between Unemployment Benefits and Health Care Costs"

 

In addition, according to Families USA, the most recent average COBRA premium for a family was $1,069 a month. Even if you qualify for the planned 65% subsidy, your monthly premium will still total nearly $375 (equating to about one-third of the average unemployment income)1.



Enter COBRA Alternatives!

It's possible to find a number of health insurance plans for less than the cost of the average subsidized COBRA premium; in fact, some plans may be available for less than the cost of a cup of coffee a day, depending on your situation.

Request a quote for a COBRA health insurance alternative plan today >>

 

1 "Squeezed: Caught between Unemployment Benefits and Health Care Costs" < www.familiesusa.org >