Reprieve — Albeit a Pricey One

When we left our intrepid family of three they faced the fearsome task of procuring health insurance as the clock ticked rapidly and inexorably toward a March deadline. 

Bugles blaring, Colts firing, the cavalry has just come over the ridge. 

Apparently, the nine months of COBRA health coverage the former employer of one of the family members was willing to pay to get that hard-working wretch to split does not expire until May 1. 

And, hosanna in the highest, the coverage can be renewed for an additional nine months, albeit at the expense of our heroes. 

There’s a reason the federal government uses the COBRA acronym. It stands for Consolidated Omnibus Budget Reconciliation Act, which is not only windy but doesn’t exactly scream out, “Hey, we’re talking important health care coverage stuff here, buddy.” 

It really is important health care stuff – particularly if you’re a human redundancy laid off, terminated or handed your walking papers as part of a scale-back, retrenchment or reduction in force. 

For those not keeping score at home, the Consolidated Omnibus Budget Reconciliation Act of 1986 amends the Employee Retirement Income Security Act (just discussing its fine points with the Mrs. last evening over foie gras and claret), the Internal Revenue Code (Hiss!) and (all rise) the Public Health Service Act. 

What the Hooded Reptile of the Subcontinent offers is a pretty cool deal particularly if you’re a casualty in the war of the Corporate Greedheads to maximize profit. 

COBRA allows former employees, retirees, spouses, former spouses and dependent children to temporarily continue health coverage at relatively lowish group rates. 

In other words, the sainted COBRA forestalls the intrepid family of three from facing the horror of coverage costs for two self-employed persons and a dependant. Coverage costs that can only be hiked by one of the struggling small business owners taking pills for high blood pressure likely caused from his former employ. 

(Interestingly, blood pressure readings were down significantly at the last physical – go figure) 

The snake ain’t cheap but it ain’t hanging around in emergency rooms neither. 

In order to extend for another nine months the coverage our family of three has now – a Health Net PPO (the Lexis of the plan options) — plus vision and dental will cost $1,660.02 a month. Pitch vision and dental over the gunwales, the monthly nut falls to $1,502.32. 

Doing the Math: $14,940.18 for nine months of the full freight. Nearly $13,521 if the teeth rot and the eyes go bad.   

Either way, big hurt on the pocketbook. 

The drag is there aren’t a lot of smiley face alternatives to pursue. Yeah, the snake may bite but whatever coverage available to our heroes when the final nine months run is going to be even pricier. 

So like way too many Californians, our heroes get to bang their heads against a real nifty Hobson’s Choice. And, again, like a lot of Californians, our heroes are gonna take the easy route, buy some time and blow off the ugly stuff until later. 



  1. there may be other options. I get calls about situations like this all the time. You may be able to get reasonably priced group health insurance through AARP (if anyone is 50 or more) or through a University Alumni Society or as a small business through MRMIB.

    Comment by Rusty Selix — 2.10.2008 @ 7:52 pm

  2. I work for Health Net. Price of coverage can be high when bought outside of a big group because the risk is not sufficiently spread. The Governor and the Speaker tried to fix this problem (A.B. 1x) by compelling people to buy health insurance if they could afford it. If most people were insured, individuals and families could be guaranteed coverage at prices that would not be based on their medical history. A.B. 1x failed in part because of the opposition to an “indivdual mandate” but without one, too many healthy– mostly young– people skip buying insurance until they really need and then the price reflects the cost of medical care. Tip to Greg: get a government job.

    Comment by patrick johnston — 3.13.2008 @ 10:09 am

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