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Health insurance options in a tough economy

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By The Staff

In the last four months, 2.6 million jobs have disappeared from the American economy. About half the people who had those jobs also lost their health insurance.

But a job loss doesn't have to mean a loss of insurance coverage, too. A provision in the recently passed economic stimulus bill makes health insurance significantly more affordable for the involuntarily unemployed. The federal government will now subsidize premiums for insurance plans purchased under the terms of a law called "COBRA."

COBRA allows people to keep their employer-provided health insurance for up to 18 months after they've left their job. Typically, COBRA participants have to pay the full premium for their old plan, which includes the amount their employer previously paid for them, plus a two percent administrative fee. Maintaining coverage can therefore be pricey.

Thanks to the stimulus package, the government will pick up 65 percent of a newly involuntarily unemployed worker's insurance premium for up to nine months after COBRA enrollment. That subsidy will keep insurance within the reach of scores of laid-off workers during these tough times.

This new benefit is only available to "qualified" individuals - but that includes many of the newly unemployed. If you were laid off after August 31, 2008, were insured through your former employer and aren't already eligible for Medicare or some other form of group health insurance (like a spouse's plan), you're eligible.

Even those who didn't sign up for COBRA in the 60 days after they lost their job, as is typically required by law, can receive the subsidy. Companies must notify all workers terminated after August 2008 of the new provision and give them a second chance to enroll in COBRA.

Even with the government subsidy, though, COBRA coverage can be expensive. So the stimulus package also allows laid-off workers to switch to a less expensive insurance plan than the one they had previously, if such a plan is available through their old employer.

But COBRA is not the only option for unemployed workers looking to keep themselves and their families covered. A health insurance agent or broker can help you determine if you might also be eligible for coverage in the individual insurance market, which contains a wide range of policy choices for consumers searching for a good deal.

The "Find an Agent" tool on the Web site of the National Association of Health Underwriters - accessible at www.nahu.org - can be a great resource for help finding an affordable individual insurance plan. There, consumers can get a comprehensive list of professional insurance agents in their area. Professional health insurance agents can help them compare plans to find one that best fits their budget and health needs.

For people with serious medical conditions, like HIV or diabetes, an individual policy can be hard to come by.

Fortunately, many states have high-risk insurance pools or other safety-net programs that provide affordable health care choices for hundreds of thousands of individuals who would otherwise be uninsured. Patients suffering from serious medical conditions should work with a professional health insurance agent to see if they're eligible for such a program in their state.

A job loss can be tough, but it doesn't have to compromise one's health care. Laid-off workers should take advantage of the affordable, high-quality health insurance options available to them and make sure they're covered. Having health insurance is in everyone's best interest.

- Janet Trautwein is the executive vice president and CEO of the National Association of Health Underwriters.