The ways in which laid-off workers will be helped under the stimulus bill’s COBRA provisions continue to be of great interest to people looking for ways to keep their health coverage. So we were pleased to see CNN and The Wall Street Journal tackle the topic.
CNN’s breezy, geared-to-the-younger-set story zipped through a bunch of options like free clinics, prescription drug programs, SCHIP, getting a part-time job at Starbucks (because it offers health insurance), and COBRA. Ah, COBRA! CNN.com anchor Reggie Aqui and senior medical correspondent Elizabeth Cohen bantered about how expensive COBRA is, and noted that maybe you didn’t need all those expensive COBRA benefits anyway. Cohen suggested that people might be better off buying their own policies, which might be cheaper. She advised viewers that private coverage would be almost as good as COBRA—a debatable point, depending on what you can afford. Cheaper policies generally cover less.
Cohen warned that unless you’re in almost perfect health—perhaps CNN’s young viewers are—getting a policy in most states can be tough. She plugged her online column that, she said, gave a link for “sort of COBRA-made easy.” The link under her column’s COBRA section led to a Department of Labor site, which offered a set of frequently asked questions on COBRA.
The Journal’s story was well, more serious, offering more context and more specifics about the provisions in the stimulus law. The story explained that the COBRA subsidy in the stimulus law not only protects people from ruinous medical bills, but “also from the inability to get new insurance due to a pre-existing medical condition.” Great, I thought, and spotted the subhed I was looking for: “Portability Rights.” I read on. The Journal told readers:
The Health Insurance Portability and Accountability Act of 1996—generally limits the ability of group health plans to exclude someone because of a pre-existing medical condition. But it only applies if you have been continuously covered by a health insurer with a break of no more than 63 days. That’s where Cobra comes in. “People often unknowingly invalidate their federal portability rights by not taking Cobra or inadvertently exceeding the 63 days,” says Janet Trautwein, chief executive of the National Association of Health Underwriters, a trade group of health-insurance brokers and agents in Arlington, Va.
Only a health underwriter (aka insurance agent), or a benefits consultant, or an employment lawyer would understand that. The Journal might as well have been writing in Greek. Yet the plan’s portability rights are some of the most important things folks should know about COBRA. Here’s our translation:
Enrolling and staying on COBRA gives you protection and rights you otherwise wouldn’t have. Let’s say you have a medical condition and don’t get a new job that offers insurance—but you know you still need coverage. The law protects you only if you sign up and stay on COBRA for the full eighteen months the law allows. After leaving COBRA, you must apply for new health insurance in the individual market within sixty-three days. There are a few exceptions, but generally if you satisfy these two requirements, any company must sell you a policy regardless of any preexisting conditions you might have.
Some states, though, may send you to their high risk pools instead. If you don’t complete eighteen months of COBRA, or if you wait too long to apply for coverage, you’re out of luck. Insurers can turn you down for any reason—even if you were sick years ago and no longer have that medical condition. You may end up with no insurance at all.
One more thing: Even if an insurer agrees to sell you a policy, it can refuse to cover a condition you had in the past or have now.