HEALTH INSURANCE: STAY PROTECTED AMID LAYOFFS,
Regulators Offer Tips, Information for Consumers
WASHINGTON, D.C. (May 14, 2009) - With the
national unemployment rate at 8.5 percent,1 families are
living on tighter budgets, and many are struggling to maintain their
health insurance coverage. Despite these challenges, there are still
ways for consumers to remain protected and save on insurance costs,
according to the National Association of Insurance Commissioners
"These uncertain times require us all to be vigilant about our
insurance to make sure we are protected," said NAIC President and
New Hampshire Insurance Commissioner Roger Sevigny. "Consumers can
safeguard themselves and their families regardless of their
employment situation by making sure they understand their coverage
and researching less expensive alternatives."
for the Newly Unemployed
It is important for the newly unemployed to examine their options
early because some choices expire within weeks of job termination.
The NAIC offers the following tips about health insurance for those
who have recently lost their jobs or believe they might need to plan
for the possibility:
- If married, consider joining your spouse's
plan: Transitioning to a spouse's plan is typically the
most affordable option, but you have to act quickly. There is a
30-day special enrollment period during which an employee can add
a dependent who has lost coverage. If that 30-day window expires,
then your spouse would need to wait to add you to his/her plan
until the open enrollment period occurs.
- Consider COBRA: The federal Consolidated
Omnibus Budget Reconciliation Act (COBRA) allows individuals who
leave their jobs at companies with 20 or more employees to
continue their health insurance coverage for 18 months. Many
states extend similar access for those who worked for small
companies through "mini-COBRA" laws. In most cases, you have 60
days to elect coverage. COBRA coverage can be expensive, because
you are required to pay the full premium, plus an administrative
fee. However, it is also retroactive once you elect it, so use
those two months to evaluate other options. Those who lose their
job because a company goes out of business might not be eligible
for COBRA if the company stops its group insurance plan.
As part of the newly enacted economic stimulus package,
the federal government will pay 65 percent of COBRA extended
coverage premiums for workers laid off between Sept. 1, 2008, and
Dec. 31, 2009. Employers had until April 18 to notify former staff
eligible for this option. There are income limits for subsidy
eligibility, however: $125,000 for single adults or $250,000 for
couples who file taxes jointly.
- Purchase a private plan: You can purchase
coverage through private providers if you meet certain criteria. A
high-deductible major medical policy will cover serious or
catastrophic health costs if you cannot afford a comprehensive
plan. Just remember, these plans will require you to pay more
out-of-pocket costs should you need medical care.
- Join a state-sponsored risk pool: For those
who have been denied affordable health coverage from a private
insurer because of a pre-existing condition, high-risk pools
provide the option of purchasing a state-sponsored insurance plan.
These types of plans can be an alternative for individuals who are
not yet eligible for Medicare or for those who are temporarily
unemployed and need insurance in the interim. Thirty-four states
offer high-risk pools, but the terms of coverage vary by state.
Check with your state insurance department to see if your state
has a high-risk pool and, if so, what your options are. Go to the
NAIC's Web site for a link to your state insurance department: www.naic.org/state_web_map.htm.
Maximize Existing Health Insurance Coverage
Those who have health coverage should also explore ways to take
full advantage of existing benefits.
- Switch to generic prescriptions: If you are
insured through your employer, your health plan likely provides a
discount for generic medication. This discount can help you save
on monthly out-of-pocket health costs. If generic options are not
available for your medications, work with your doctor to help
ensure your medications are listed among your health plan's list
of preferred prescriptions. If a drug is not on the formulary,
then there is higher cost-sharing (co-insurance or co-pay).
- Schedule an annual check-up: Annual physicals
can catch health problems before they become serious, saving you
money in the long run. Many insurance plans cover 100 percent of
wellness care for routine exams, immunizations and diagnostic
- Stay in-network: Before booking an
appointment, verify that your doctor is included in your plan at
preferred rates. Sticking to network providers helps ensure lower
co-payments and out-of-network costs. If you need to have a
procedure done at an out-of-network provider, research the costs
and be prepared to negotiate the price.
- Use preventive benefits: Some employers offer
a subsidized gym membership or nutrition program. Staying healthy
and active will reduce your chances of needing costly high-risk
medical procedures throughout your lifetime.
If you have questions or are
confused about your insurance coverage, contact your state insurance
department. Visit www.naic.org to find contact information for your
state insurance department.
Get smart about your insurance
needs. For more information about auto, home, life and health
insurance options - as well as tips for choosing the coverage that
is right for you and your family - visit www.InsureUonline.org.
1U.S. Bureau of Labor
About the NAIC
Formed in 1871, the National Association of Insurance Commissioners
(NAIC) is a voluntary organization of the chief insurance regulatory
officials of the 50 states, the District of Columbia and five U.S.
territories. The NAIC has three offices: Executive Office, Washington,
D.C.; Central Office, Kansas City, Mo.; and Securities Valuation Office,
New York City. The NAIC serves the needs of consumers and the industry,
with an overriding objective of supporting state insurance regulators as
they protect consumers and maintain the financial stability of the
insurance marketplace. For more information, visit www.naic.org.
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