This is interesting as my DH will be "released" from his job in a couple of months.As far as I can tell, it applies to laid-off employees. There seems to be a couple of aspects to this:
A temporary subsidy to laid-off workers to pay 65% of their COBRA premiums. This would apply to workers laid off from September 1, 2008 to December 31, 2009. This provision seems to have decent support.
(2) A permanent provision that would require COBRA to be offered to any employee with at least 10 years of service (and ANY employee over 55 regardless of service level) -- not just for 18 months, but until they reach age 65. This means someone who is 33, has 11 years in service and gets laid off... they could stay on COBRA for 32 years. This provision has widespread opposition from business leaders and seems much less likely to pass. (For what it's worth, as I write this, I have 9 years and 9 months of service with my current Megacorp. Hope this doesn't give them an incentive to axe me -- but at least if I do, maybe Uncle Sugar will pay 65% of my COBRA...) Personally, I think the adverse selection potential of this provision is scary.
I don't think "Saddling employers with the cost of non-employees" is a fair characterization of COBRA. The former employee pays the full cost of coverage at the employer's group rate. I do recognize, though, that a lot of COBRA participants could weight the employer's coverage pool a bit toward higher average costs...
That's the thing. The people who are helped by it are the ones who might have to pay more than COBRA in the individual market -- the older folks, the folks with chronic conditions, the morbidly obese, the ones with a history of cancer, et cetera. As a result I suspect a proposal to make people "permanently eligible" for COBRA would keep many of the worst risks in the group plan while the younger, healthier people who have subsidized the pool leave for their own much more affordable policy. It seems the adverse selection would be horrible here.COBRA is so expensive for people that extending it without a subsidy will not be very helpful. My COBRA for a family of two is now nearly $1200 a month.
COBRA is so expensive for people that extending it without a subsidy will not be very helpful. My COBRA for a family of two is now nearly $1200 a month.
One of the reasons I opted for the higher-deductible plan was because it would be quite a bit more affordable if I needed to use COBRA. The [-]tax dodge[/-] ability to salt nearly $6000 a year away into an HSA helped, too.Probably because it's a "cadillac" plan, as many employer-based plans are. When I FIRE'd, I was able to switch my COBRA from the "cadillac" plan to one with a high deductible. This cut the monthly premium very significantly for the 18 months I was on COBRA. If your employer offers this, I think it is something worth looking into.
One of the reasons I opted for the higher-deductible plan was because it would be quite a bit more affordable if I needed to use COBRA. The [-]tax dodge[/-] ability to salt nearly $6000 a year away into an HSA helped, too.
But surely COBRA extension is not the solution promised by the Obama campaign? The subsidy makes sense as temporary relief, but can anyone help me understand how the extension could possibly fit in with the kind of long term solution implied in the campaign?
It can't. Another big problem with Obama's campaign proposal is that he says he's against mandates for adults, which is a recipe for adverse selection. Without mandates, people won't buy the insurance until they have (or anticipate) large medical expenses.
The most practical, low-cost first step we can take as Americans to lower health costs is to reduce our blood pressure. Do this by relaxing, and specifically by forgetting the pre-election posturing and position papers. That was then, this is now. What was said then was said for a reason, and what is being done now is being done for a reason. Breathe deep, let the pent up frustrations and bitterness leave your body. Visualize the angst draining out of your feet.
There! I'll bet our blood pressure dropped an average of 5 points. Repeat this every time someone brings up the "Hey, I thought we were going to . . ." stuff. It's not productive to live in the past.
The bill also would require employers to permit involuntarily terminated individuals ages 55 and older to continue group health benefits until they become eligible for Medicare or employers discontinue health plans subject to coverage continuation requirements.
[Moderator edit: Photo removed per OP request]
Similarly, any involuntarily terminated worker in an affected group health plan for more than 10 years could keep COBRA coverage until becoming eligible for Medicare.
Why is this needed if Obama plans to follow through with his campaign promise to make affordable coverage available to all?
...the plan is a temporary lifeline, hasty measures for nearly desperate times.
I was reading an article about the stimulus bill, it appears to me it would not cover a person wanting to retire early. I found this wording in it: I tried to remove the picture but was unable. I say this jokingly, but I think I would have to do something to get fired to qualify for the coverage. I guess the actual wording in the bill could be different since this article is dated Jan. 23 2009.
Steve
Lawmakers Consider Dramatic COBRA Expansion - Updated - Regulatory,Legislative and Tax Issues - Life and Health Insurance News
Go out to the seedy side of town and get yourselves some phoney id's, SS numbers, and get a shadow pedigree for medical treatment. This way if you get sick, go to the ER, present your "id" and get on medicaid.
Once on medicaid, then you are home free.
Think that is immoral, look at what Ball street did to us and now are settling us with some big time debt. May as well become part of the problem than the solution.
jug