People shut out of COBRA have few insurance options
— -- Terry Carr, 55, of Sherman, Texas, lost her job as a classified advertising assistant for Stephens Media Group in November, and her company-provided insurance ended Dec. 1. But because of the new COBRA subsidy, she has been able to continue her health insurance for $157 a month.
Before the subsidy kicked in, her premiums were about $450 a month, says her husband, Ken, 75, who is covered by Medicare.
Carol Horace, 57, of San Francisco hasn't been as fortunate. Horace's former employer, the Stanford Group, was put into receivership earlier this year after its founder, Allen Stanford, was charged with engaging in an $8 billion fraud. Stanford has denied the charges.
Her last day on the job was March 6, and her coverage will end April 30. Because her former employer is terminating its group coverage, Horace is ineligible for COBRA, which allows people to continue their employers' coverage. Nor is she eligible for the COBRA subsidy.
The only replacement policy Horace has been able to find would cost her $828 a month. Her application for a less-expensive individual insurance policy was declined, even though she is in good health.
"My health care between now and age 65 is like paying another mortgage," she says.
Thousands of people who worked for companies that have gone out of business could find themselves in similar straits. More than 11,600 businesses filed for Chapter 7 bankruptcy during the last four months of 2008, the most recent data available.
Other jobless workers may be ineligible because of where they live. The federal COBRA law only covers companies with 20 or more workers. Thirty-nine states and Washington, D.C., have "mini COBRA" laws that require small companies to allow departing employees to continue their group coverage.
But some state mini-COBRA laws aren't as comprehensive as the federal law, according to a recent study by Families USA, a health care advocacy group. In Tennessee, for example, workers are eligible for only three months of continuous coverage.
