Smart Health

(ARA) - As the economy continues to struggle, an increasing number of people are faced with the unfortunate prospect of losing their job. The numbers are startling -- by February 2009, the U.S. unemployment rate had risen to 8.1 percent and the number of unemployed Americans had increased by 5 million over the last year.

One of the primary concerns facing the recently unemployed is the loss of health benefits. Most U.S. workers receive health benefits through their employers, so they associate health insurance with employment. As unemployment rises, more people must find a way to pay for health insurance on their own.

Unfortunately, most Americans are unfamiliar with the options that they have as individual consumers. A recent survey conducted by Aetna found that the majority of consumers were unaware of an important option -- individual health insurance plans. The survey also found that many consumers had significant misperceptions about the cost of coverage under the Consolidated Omnibus Budget Reconciliation Act, also known as COBRA, another insurance alternative which can cover a person for up to 36 months after losing a job.

“Our research found that 69 percent of consumers had never heard of individual health insurance plans or did not know much about them, and 38 percent said they expected to pay the same premiums for COBRA coverage as when they were employed when they could actually pay almost double in many instances,” says Frank McCauley, head of Aetna’s Consumer Business Segment. "With more and more people entering the individual health insurance market, it is essential for people to have a clear understanding of all of the options that are available to them."

Knowing All of Your Options
According to McCauley, there are a number of different options that people should consider in this situation. This includes becoming a dependent on their spouse’s plan; receiving coverage through an alumni association or club membership; or finding out if they are eligible for free or low-cost state programs. Almost 11 million Americans are actually eligible for these free or low-cost plans, such as Medicaid and State Children’s Health Insurance Programs (SCHIP), but are not enrolled and remain uninsured.

Another option is COBRA coverage, which allows people to keep the same coverage they had through their employer, even after they lose their job.

While this serves as a good safety net, it can be expensive. Families USA, a consumer health organization, found in January 2009 that the average national premium to cover a family with COBRA eats up almost 84 percent of unemployment benefits.

A temporary solution to the high cost of COBRA came as part of the national economic stimulus package. Under this package, people who were laid off (or lose their jobs) between September 1, 2008 and December 31, 2009 are eligible for a 65 percent subsidy to help them pay for COBRA coverage. This means they will have to pay 35 percent of the usual cost of COBRA.

However, even with this subsidy, many consumers may be able to find a more affordable individual health insurance plan. Many insurers sell these plans directly to consumers, and McCauley says that Aetna has a wide range of plan designs.

“We have plans that are similar to what a person would receive from their employer, as well as lower-cost options that might be a better fit for their budget,” McCauley adds.

People can go to Aetna’s Web site www.aetnaindividual.com to learn more about these plans, get a quote and even apply online. McCauley adds that consumers can also go to a Web site like www.ehealthinsurance.com to compare plans from different insurers.

To help educate consumers on all of the different health insurance options that are available to them, Aetna also developed information on the Plan for Your Health Web site www.planforyourhealth.com. This free site is a good starting point when searching for health insurance on your own.

Questions to Consider
As you start to search for the right health insurance option for you, McCauley says there are three questions that every consumer should keep in mind:
* How long do you expect to go without insurance? Not having insurance for a few months is very different from not having it for a few years.
* How much coverage do you need? A young man looking for his first job and a mother of two who owns her own business will make very different choices.
* How much do you want to pay? A lower premium (the amount you pay each month) might seem to be the best way to save a few bucks. Just be sure to find out how much more you will have to pay if something happens to you.
Whichever option a person chooses, it is extremely important to find some type of coverage.

“Health insurance is one of the primary ways that people can protect both their health and their financial well-being,” says Tracey Baker, a certified financial planner and co-author of “Navigating Your Health Benefits For Dummies”. “Even during difficult financial times, it is important to try to provide this security for you and your family.”

Courtesy of ARAcontent
 

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