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COBRA Subsidies to End, but When?

 

The COBRA subsidies that help laid off employees continue with their health insurance has not been renewed. As COBRA is a way for laid off workers to continue with health insurance while looking for another job, the subsidies make the insurance affordable for someone living on unemployment. If you become unemployed after June 1, 2010, you will not receive the subsidy. Those who were unemployed before June 1 will continue to receive the aid as long as they are eligible for COBRA health insurance

 

What Are the COBRA Subsidies?

The COBRA subsidies cover the cost of 65 percent of your health insurance premiums while on the COBRA program. As long as you qualify for COBRA health insurance, you are in position for the subsidy relief. The subsidies were meant to help lessen the financial strain of unemployed individuals and prevent them from having to choose between feeding the family or having health insurance coverage. According to statistics from Family USA, over 80 percent of unemployment income is eaten up by COBRA health insurance premiums. That does not leave enough left over for the mortgage and groceries. .

 

The Reason COBRA Subsidies are to End

COBRA subsidies were only meant to be temporary aid to help individuals and families to weather the storm. The only problem is that the storm is lasing longer than expected. The reason the subsidies were not renewed is because of the immense cost. If the program were renewed through the end of 2010, it would add another 7.8 billion dollars to the federal budget. At a time when federal and state governments are facing huge deficits, this is a tough sell.

 

Is There Hope for the COBRA Subsidies?

While the COBRA health insurance continuation premium subsidy has not been renewed, there is still a little hope. President Obama, along with other members of the Senate and House of Representatives are calling for a six month extension. There is some buzz that the subsidies will be re-enacted. It is still a hard sell, but there is hope.

 

What to Do for Health Insurance in Place of COBRA Subsidies

If you don't qualify for COBRA subsidies, you may want to look into purchasing health insurance on your own. COBRA health insurance can be more expensive than insurance you can find on your own. You may also want to seek out a health insurance plan that offers less coverage for the short term, just to make it until you get back on your feet. You can shop around for health insurance by gathering online rate quotes. You can compare various plans to see which offers you the most affordable option, but still provides adequate health insurance coverage.

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