In 2006, Massachusetts established a broader health care system to provide universal health insurance coverage to its residents while also cutting down costs. The Massachusetts health care reform features several crucial components that expanded coverage to more than 100,000 uninsured.  The reform requires all Massachusetts adults to enroll in a health insurance plan or risk penalty, while all employers must also provide health insurance to employees or pay a penalty. Low-income adults have the opportunity to join one of the state-run Commonwealth Care plans.

Massachusetts Must Control It's Health Insurance Costs

While Massachusetts has succeeded in expanding health insurance coverage, it has not succeeded in slashing costs. As of June 2010, Massachusetts has the lowest uninsured rate in the United States at 4.8 percent, having slashed the uninsured rate by 60 percent. Compare that to the United States as a whole, where 15.4% of citizens are not covered.  Massachusetts’ efforts in expanding covered should be classified as successful.

However, the successes of broader coverage cannot hide the plan’s inability to cut costs.  The wide coverage, coupled with state subsidies and reduced rivalry between health providers, has caused costs to rise. The Massachusetts Department of Insurance has denied insurers’ demands for rate hikes in an attempt to keep expenses low for consumers. Meanwhile, insurers argue that reducing rates without slashing health provider costs places undue stress on them. Premiums have increased substantially for individuals and families, while the use of the emergency room for non-emergencies did not markedly decrease, perhaps indicating a deeper issue: the primary care physician shortage.

The similarities between the Massachusetts plan and the 2010 US Affordable Care Act make Massachusetts’ successes and failures ever more glaring on the national stage. According to a report from Fortune Magazine, both the Massachusetts and Obama plans increase health care demands without addressing health care shortages.  Prices have gone through the roof, and according to Fortune, will not decrease until the government stops targeting insurers.  Insurance pools also grow more expensive as younger, healthier members drop out while sicker members stay in.  Subsidizing middle-income plans may also prove expensive, while additional state-mandated benefits have also strained the system.  According to Fortune, Massachusetts residents have begun to manipulate the system to optimize their health insurance benefits and subsidies.

If Massachusetts can successfully manage the costs associated with its health care reform, perhaps this will bode well for the Affordable Health Care Act.  Four years into the Massachusetts plan, costs have continued to skyrocket as more residents are covered. In the current economy, controlling costs is ever more crucial to the health care industry and to the country’s economy as a whole.  Solving the primary care and health provider shortage may prove a good step in shaving down costs.

In the end, it will be the costs, not universal coverage, that determine success for both the Massachusetts and federal reform programs. I hope that both reforms can find a way to cut costs beyond placing limits on insurers, perhaps by streamlining health care overall and improving the pool of preventative

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.

Thousands of families who took advantage of the federal government subsidy for extending their former employer’s health insurance coverage through COBRA have had to rethink their options in the past few weeks. On June 1, 2010 the federal government’s subsidy of COBRA health plan extensions expired. COBRA is a federal program which allows workers who have been laid off to continue the health insurance benefits their families received through their job after their employment has been terminated. With employer-sponsored coverage, companies contribute a given portion of the cost of their workers’ health insurance premiums and workers pay the rest. When a worker is laid off, COBRA gives that individual the option to remain on the same insurance plan as long as they agree to pay the total cost of monthly premiums themselves. Unfortunately, the full burden of such premiums is often too onerous for unemployed individuals to bear, especially in economic times such as these. That’s why as part of last year’s economic stimulus package, the federal government offered to subsidize the cost of extending one’s old coverage through COBRA at 65%. This subsidy was available beginning March 1, 2009 and offered 15 months of subsidized coverage to those who took advantage of the extension.

According to a study by the Treasury Department up to 1/3 of eligible unemployed workers signed up for the program. Last Tuesday, this benefit expired leaving thousands of families who took advantage of the opportunity to extend their health plan feeling they can no longer afford to continue this coverage without the help of the subsidy.  One exception to the June 1, 2010 expiration date remains for those who did not become unemployed until more recently. Those families who accepted the COBRA subsidized extension after March 1, 2009 but before December 31, 2009 are able to continue COBRA until September 30, 2010 when the subsidy expires completely. These families will be dropped off COBRA on a rolling basis based on when they signed up.

Though Congress has extended the COBRA subsidies four times since February 2009, the most recent proposed subsidy extension failed due to worries on the part of legislators about the federal budget deficit. Some states are offering additional COBRA extensions (called “mini-COBRA” laws) to supplement federal COBRA to extend benefits up to 36 months but again, the cost of these premiums tend to be much higher than those for plans available on the individual market.

Recently we have had many families losing their COBRA coverage visit our website to look into other, less expensive health insurance options offered on the individual and family health insurance market through us at Health Plan One. With individual and family plans, consumers are able to tailor their coverage so they only pay for the benefits which meet their specific needs. If you’re interested in doing your homework on the individual and family plans available to you, call one of our licensed agents at (877) 567-5267 for an expert, personalized consultation. Other public options for individuals with major preexisting conditions dropping their COBRA exist in most states, as do so-called “HIPAA-eligible” plans. Visit your state’s informational page at healthplanone.com to learn more about the publicly funded programs available in your area which benefit groups like pregnant women, children, and low-income families.

According to a UnitedHealth Group poll, more than half of young adults surveyed lack information about their options for health insurance. The poll surveyed 1,000 young adults between the ages of 18 and 21. The survey found that 67% of the students polled haven’t made any plans for health insurance when they graduate. 69% of those covered by their parent’s health insurance plans are unclear about the details of their coverage as well as 26% having no idea when their coverage will end.

Approximately 87% state that educators should do more to communicate information about obtaining health insurance and the basics of health insurance. Some of the options recent graduates and young adults have include:

• Employer-sponsored health insurance: If you’re lucky to get a job out of college, you will most likely have the option of an employer sponsored group plan. Benefits are usually very comprehensive and your employer pays for a portion of it if not all.

• Short term health insurance: If you are looking for a job and working part time or not at all for the meantime, getting a short term health insurance plan may be beneficial. Plans tend to last up to one year and you can cancel at any time. They are fairly low cost but they will most likely not cover any preexisting conditions.

• COBRA: COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1986, lets students keep their coverage under their parents for up to 36 months. However, COBRA plans are expensive.

• Individual Health Insurance plan: If the above options don’t seem appealing, an individual health insurance plan is another option. Either going directly to a carrier like Aetna, or a health insurance broker, you can choose a plan that caters to your needs. You can also cancel at any time if you get a job or find another plan that suits you better.

Just remember, health insurance is vital and everyone should have it. If something were to happen, it will cost a lot more to treat you than that couple hundred you pay a month for your coverage.

According to a press release last week, Governor David Patterson (NY) submitted a bill to ensure that New Yorkers laid off by small business can qualify for federal benefits that pay up to 65% of COBRA health insurance premiums. COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1985 gives workers and their families who lose their health benefits the right to choose to continue coverage provided by their group health plan for a limited period of time.

“The need to pass this bill is urgent because we must ensure as many people as possible retain their health coverage. One of the greatest challenges facing the State as a result of the current economic crisis is how we help unemployed New Yorkers retain access to their health insurance. Given the record levels of unemployment announced just last week, we need to move quickly to amend State law to make this subsidy available to as many New Yorkers as possible,” states Governor Paterson.

Unfortunately, COBRA is very expensive. Workers may be charged up to 102% of the full insurance premium. The American Recovery and reinvestment Act (ARRA), signed into law in February, makes a subsidy of 65% available to help cover the cost of COBRA health insurance premiums. Income limitations apply and no subsidies are available to individuals making annual incomes greater than $125,000 and couples making more than $250,000 annually.

Under the new economic stimulus plan, the federal government will subsidize 65% of the cost of health insurance under COBRA for workers who have lost or may lose their jobs between September 1, 2008 and December 31, 2009. The stimulus package was signed into law on February 17.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act of 1985, allows individuals who have been laid off to stay on employer-based health plans for up to 18 months after termination. Individuals who elect COBRA coverage must pay the share of the premium that they paid while working, as well as their employer’s share plus a 2% administrative charge. COBRA, for most, is too expensive and individuals usually elect to go without health insurance or buy an individual health insurance plan through a private health insurance carrier.

COBRA’s revision under the economic stimulus plan only allows individuals to stay on COBRA up to 9 months. So, what happens in 9 months when you no longer can benefit from COBRA coverage and your new job, if any, doesn’t provide employer based coverage? Individual health insurance plans from private health insurance brokers or carriers, such as Health Plan One, can help in providing affordable health insurance.

High deductible plans offer low premiums and work best for healthy people who don’t go to the doctor that often. Now why would you need insurance if you’re healthy? One reason, life is unpredictable. Sudden illnesses can occur as well as tragic accidents and there is no better way to prepare for what may or may not happen with a health insurance plan.