There's gotta be a better way than COBRA

When you lose employer health benefits either because you voluntarily or involuntarily left your job or your employer no longer offers health coverage, you're eligible for coverage under COBRA. Also known as Consolidated Omnibus Budget Reconciliation Act, COBRA, is actually a law passed by Congress in 1986 to provide continuation of group health coverage that otherwise might be terminated. Now that you know it's a law you're probably nodding your head saying "Ah, that's why it stinks", though you might choose another adjective if you like.

COBRA stinks because it's crazy expensive. It’s so expensive, in fact, that a recent estimate revealed that less than 10 percent of eligible workers were opting to continue their employer-sponsored coverage through COBRA. So in attempt to tame the reptile, the American Recovery and Reinvestment Act of 2009 will now subsidize 65 percent of a laid-off worker's COBRA premiums. That's not bad news if you can get COBRA, but more workers are finding that their companies have decided that health care is too big of an expense to offer. In these cases employees are not eligible for COBRA.

Direct from the COBRA FAQs

Am I eligible for COBRA if my company closed or went bankrupt and there is no health plan?

If there is no longer a health plan, there is no COBRA coverage available.

That also means that if your company is still in business, but has dropped coverage, you may be out of luck.

There's gotta be a better way.

Friday Encore: Medical Gift Cards

Friday Encore features a past blog posting that I thought you might not want to miss. Okay, call it a repeat if you want. When necessary the post may be updated with new information or data to keep it relevant. The following was originally posted April 15th, 2008.

Medical Gift Cards--Something to Consider for the Holidays

My mom's birthday is coming up and for me that means the start of the longest gift buying season. It'll soon be Mother's Day, then Father's Day with other birthdays and anniversaries sprinkled here and there. I think there's even Grandparent's Day sometime. They're all stretched out over time until the big bang in December. And while gift cards aren't the most exciting thing to open they are darn convenient and useful.

Late last year Visa introduced an interesting twist on the whole gift card concept--the Medical Gift Card. It's marketed as a great present for parents, grandparents and anyone who might have a fixed income and lots of medical expenses.

It works just as you would imagine. You purchase a prepaid card for someone. They can then use it to pay for prescriptions, doctor visits, etc. They can use it to pay their copay portion of a medical expense or if they need to the entire expense. Each card can carry a limited amount of $5,000. Like most Visa gift cards there are fees, like $4.95 to purchase the card and a monthly fee that is deducted from the card.

But I gotta say yeah to Visa for putting out their own creative solution to the healthcare crisis. Granny doesn't really need an IPod or candles for her birthday. But gifting her a card to help her pay for scripts can really help her out.