The COBRA Subsidy Ends -- eHealthInsurance Offers Seven Tips for Consumers on How to Cope Without COBRA

MOUNTAIN VIEW, CA--(May 13, 2010) - The 15 months of subsidized COBRA Health Insurance premiums will come to an end in June 2010 for those who began receiving it in March 2009. Today eHealthInsurance (NASDAQ: EHTH), the leading online source of health insurance for individuals and families, released seven tips for consumers facing the end of their COBRA subsidy(1) -- a program that reduced the amount individuals had to pay for their COBRA health insurance premiums by 65% for 15 months.

 

The largest single group of people set to collectively roll-off of the COBRA subsidy could be the group that loses their subsidies in June. Anyone qualifying for the subsidy between September 2008 and March 2009 -- a six month period when unemployment increased from 6.2% to 8.4%(2) -- will have reached the end of their 15 subsidized months of COBRA in June 2010. In 2009, an estimated 7 million Americans (and their dependants) were expected to use the COBRA subsidy according to the Congressional Budget Office.

 

People scheduled to lose their COBRA subsidies will have to make some choices and explore their options for finding health coverage, including paying full price for COBRA. Health Reform Legislation provides additional options for consumers who cannot afford to continue their COBRA coverage without the 65% federal subsidy. 

 

The following tips outline private health insurance, public programs, and cost-saving advice to help people retain coverage in one form or another, or to at least reduce their medical expenses:

1. Individual Insurance Market Reforms -- Health Reform Legislation makes some important improvements to the non-group insurance market in 2010. First, your insurance policy can't be rescinded or canceled because you get sick. Second, insurance companies can no longer put limits or caps on the amount of money they spend on your medical care. Third, these policies will be required to cover the cost of preventive care at no out-of-pocket cost to the policyholder. You still need to go through medical underwriting for insurance in this market, so it's not for everyone. But, reasonably healthy people can find quality, affordable coverage in this market and take advantage of individual market reforms.

2. Officially start your own business and get tax break on your health insurance -- Many of the recession's unemployed are earning supplemental income by consulting or running a small side business. A person in this situation may be able to qualify for a small business health insurance plan with only one or two total employees, depending on the state they live in. If you have a pre-existing medical condition that doesn't allow you to qualify for individual coverage, small group health insurance is still an option because you can't be turned down due to a pre-existing medical condition. And, starting this year, health reform lets you get a tax credit of up to 35% of the money your business spends on health insurance premiums. To qualify, a business must pay at least 50% of the total cost of the premiums (or 50% of a "benchmark" premium). If your business has 10 or fewer employees who earn an average wage of less than $25,000 per year qualify for the full benefit you get the full 35% discount.

3.Get hip to HIPAA -- HIPPA (the Health Insurance Portability and Accountability Act of 1996) is a law guaranteeing consumers who meet specific criteria access to special health insurance plans. If you can show that you have had creditable health insurance coverage until recently -- with a gap of less than 63 days -- you may qualify for a HIPAA plan. This is often the best option for people who can afford COBRA at the full-price and have exhausted their 18-months of eligibility. Though HIPAA coverage can be expensive it provides persons with pre-existing medical conditions valuable access to coverage. 

4. Good news for children -- In 2010, health reform legislation also begins to prohibit insurance companies from declining a child under 18's application for health insurance, based on pre-existing conditions. If you have a child on COBRA today that can't qualify for coverage in the non-group market, you may want to consider covering them for six months using a short-term health insurance policy (which can be easier to qualify for) and then buying them their own coverage, or adding them to your new or existing family plan in the fall. Consumers should know that short-term health insurance does not count as creditable coverage (a.k.a. health coverage that would qualify a person for HIPPA), and typically excludes coverage of pre-existing conditions and some other important benefits. But, it can provide important protection against unexpected, short-term illnesses and injuries until health reform kicks in to grant your child with access to creditable health coverage. 

 

5. Understand your government-sponsored options -- Health reform legislation expands access to programs like CHIP and Medicaid, and creates new or expanded high-risk pools for some states. For those who can't afford their own coverage or who have pre-existing medical conditions, there may be new or existing government-sponsored options that provide an alternative. The non-profit Foundation for Health Coverage Education is an excellent resource for this type of information. You can call them at 800-234-1817 or visit their website at www.coverageforall.org.

6. You can negotiate the price of care -- Prices for the same healthcare service, test or treatment can vary by thousands of dollars. These variations are typically due to pre-set prices negotiated between the care provider and insurance company. Always check the Healthcare Blue Book's fair price (what insurance companies pay their doctors, hospitals, and others in your market) before you agree to a price. If the Blue Book price is lower, ask for a discount. You can even check the Blue Book price via your mobile phone at your provider's office.

7. Make sure to document all costs before you say yes -- There are multiple fees associated with invasive procedures such as surgery. Separate charges can be billed for the facility, surgeon, anesthesiologist, supplies and more. Check the Healthcare Blue Book and make sure you understand all the fees associated with what you need done. Then document them with your provider, so if the bill is higher than what you expect, you can question it.

Notes:
(1) See eHealth press release from February 8, 2010: http://news.ehealthinsurance.com/pr/ehi/forgotten-health-insurance-consumers-153592.aspx

(2) Based on monthly unemployment numbers reported by the Bureau of Labor Statistics for September 2008 through March 2009 (http://www.bls.gov).

About eHealth
eHealth, Inc. (NASDAQ: EHTH) is the parent company of eHealthInsurance, the nation's leading online source of health insurance for individuals, families and small businesses. Information and resources are available on various health plans, ranging from individual and family, short-term medical, and Medicare insurance. Consumers can get quotes from leading health insurance carriers, compare plans side by side, and apply for and purchase health insurance. eHealthInsurance is an online marketplace licensed to sell health insurance in all 50 states and the District of Columbia. eHealthInsurance and eHealth are registered trademarks of eHealthInsurance Services, Inc. For more information, see www.ehealthinsurance.com.