COBRA: Under-covered and misunderstood?

In the Columbia Journalism Review, Trudy Lieberman, president of AHCJ’s board of directors, reviewed recent media coverage of the federal COBRA plan and its recent stimulus subsidy. She found the plan’s portability provision to be particularly under-covered and poorly explained. Under the portability program, COBRA customers who meet certain requirements are guaranteed to opportunity to purchase private insurance upon finishing the program, regardless of pre-existing conditions. Here’s her take on the provision:

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.


A Commonwealth Fund analysis found that only 9 percent of laid-off workers took advantage of the COBRA program and that for many, the program was prohibitively expensive.

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