Obama administration officials and some Senate Democrats are optimistic that the federal subsidy of COBRA benefits passed by the economic stimulus bill will be extended by inserting  a provision to this effect into the “extenders” package of jobless benefits working its way through the Senate this week. This bill is co-sponsored by Senators Bob Casey Jr. (D-PA) and Sherrod Brown (D-OH). As discussed in my last post here, it is estimated that over 2 million families who would have lost their employer-sponsored health insurance as the result of a lay-off took advantage of the COBRA subsidy. Instead of losing their coverage, COBRA has allowed them to keep their previous employer’s health insurance and the federal government’s subsidy has paid for 65% of the total cost of maintaining that coverage. This subsidy was a huge help for families who otherwise would have had to assume 100% of the total cost of premiums (including the portion their employer used to pay) to maintain their coverage under COBRA.

COBRA Subsidy Running Out for the Unemployed

As of June 1, 2010, the 15-month COBRA subsidy has expired for those who took advantage of it when it first became available in February 2009. The National Employment Law Project estimates that more than 144,000 households each month will be dropped from the subsidy as these families hit their 15-month mark. Many families whose COBRA subsidy has not yet expired hope the Senate will pass this extension of the COBRA subsidy beyond the 15 month mark so that they can continue paying just 35% of the total cost of their previous employer’s insurance premiums and keep their old coverage. Here are five reasons why I don’t think an extension of this subsidy will make it into the final jobless benefits package which should come to a vote this week:

1)      Centrist House Democrats rejected a similar proposal to extend COBRA subsidies in May 2010 because of concerns about continuing to run-up the national deficit.

2)      Last week, the non-partisan Congressional Budget Office evaluated the Senate’s trimmed down version of the proposal which is in currently in the works. Extending the COBRA subsidy again is estimated at $4.1 billion, which is much higher than supporters had anticipated.

3)      Congress already extended the subsidy once in November 2009, allowing COBRA beneficiaries to continue receiving the 65% subsidy of their total premium cost for a maximum of 15 months. The original subsidy as passed in the American Recovery and Reinvestment Act of 2009 was set to expire after 9 months.

4)      There are few other areas of the bill from which co-sponsors Sens. Bob Casey Jr. (D-PA) and Sherrod Brown (D-OH) can pull funds for the subsidy. The subsidy extension is only part of a package of provisions the Senators are trying to attach to the must-pass legislation. Their whole package has a total cost estimated at nearly $7 billion. Other parts of their provisions would extend unemployment benefits and make changes in dozens of federal programs, and these are not areas from which the senators could easily justify cutting funding in order to make room for another COBRA subsidy extension.

5)      A similar proposal to extend the COBRA subsidy was dropped from the House-passed bill. Additionally, Senate Democratic leaders omitted it from their version when the bill was originally drawn up.

Unfortunately, it seems that given the strained economy and need for budget-consciousness in Washington families who have relied on the federal subsidy to keep their coverage under COBRA will have to reevaluate their options.

Blue Cross Blue Shield member health insurance plans have been launching new individual health insurance products that are designed to be more affordable. Due to the weak economy and our country’s recession, many people are losing employer-based health coverage and are resorting to individual health coverage. Below are three BCBS plans that are launching or have already launched affordable individual health plans.

In September, Blue Cross Blue Shield of Arizona launched 5 new individual plans to provide more options to meet the needs and budgets of Arizona residents. Richard L. Boals, BCBSAZ president and CEO says “By matching our individual product line to fit the evolving health coverage needs of today’s customer, we are providing competitively priced products delivered with the quality and service customers have come to expect from Blue Cross Blue Shield of Arizona.”

Their new plans are:

• BlueOptimum is a preferred provider organization (PPO) with co-pays covering in-network services such as office visits and urgent care. Deductibles range from $250 to $10,000 for individuals in-network, and $500 to $20,000 for families in-network. Coinsurance is 80/20 meaning BCBSAZ pays for 80% of most covered services after you meet the deductible and you only pay 20%. BlueOptimum is ideal for people who want set co-pays and first dollar coverage for in-network preventive care visits.
• BlueValue is a PPO plan with a mix of co-pay and coinsurance cost sharing, and the flexibility of fixed generic prescription co-pays. Deductibles range from $250 to $10,000 for individuals and $750 to $30,000 for families in-network. Coinsurance is 70/30 after the deductible is met. BlueValue is ideal for people who want to pay for services with a blend of co-pays and coinsurance that result in a lower monthly premium and who also want no deductible for preventive care visits.
• BlueEssential is a low cost PPO plan with basic coverage, a $1,000 cap on preventive care to help make the policy more affordable, and co-pays for three primary care physician (PCP) office visits per year. Deductibles range from $250 to $10,000 for individuals and $750 to $30,000 for families in-network. BlueEssential is ideal for people who want a plan with low monthly payments designed for low utilization of services and $15 co-pays for generic prescriptions.
• BluePortfolio is a qualified high deductible PPO plan for use with a health savings account (HSA). HSAs are tax-exempt trust or custodial account to be used for paying qualified medical expenses. Deductibles range from $1,750 to $5,500 for individuals and $3,500 to $11,000 for families in-network. BluePortfolio plans are ideal for people who want co-pays for in-network services such as physician office visits, urgent care, and prescription medications.
• BlueSecure and BlueSecure Plus are two options for a Health Maintenance Organization (HMO). PCP referrals are not required to visit specialists and co-pays apply to many covered services. The deductible for BlueSecure is $1,000 for individuals and $2,000 for families in-network. There is no deductible for BlueSecure Plus. BlueSecure or BlueSecure Plus is ideal for people who want an HMO plan that covered routine maternity after a 12-month waiting period or who want co-pays that cover most services.

WellPoint’s SmartSense product line makes up more than 50% of individual health insurance sales in California and is also available to Georgia residents. Since November, their SmartSense line of individual health insurance plans has been in the process of being launched in Colorado. SmartSense is tailored to fit your needs and is priced very low with premiums ranging from $33 to $178 a month for a health 25 year old male. The plan offers a wide range of annual deductibles and monthly rate combinations. It also has lower rates on services from in-network providers. They offer simple co-pays for your first three in-network doctor visits without having to meet your plan’s deductible first. SmartSense also offers out-of-state coverage which protects you from the high cost of unexpected emergencies when you travel.

Horizon BCBS of New Jersey has been making adjustments to their individual health plan prices. A new law in New Jersey allows them to use an applicant’s age in their rate calculations which should make plans more affordable for younger individuals.

Blue Cross Blue Shield isn’t the only health insurance company trying to launch new plans for individuals. Health Insurance is vital and many health insurance carriers are trying to make health plans for individuals more affordable.