Ask the Experts: What If COBRA Is Too Expensive?

Q. I lost my job, so my family is without health insurance. But COBRA is too expensive. What do I do?

A. COBRA, the Consolidated Omnibus Budget Reconciliation Act of 1986, is a federal law that enables workers to temporarily continue group health insurance when they lose a job. But it can be very costly, and many eligible people opt out. Under the new economic stimulus plan, if you lose your job between Sept. 1, 2008, and Dec. 31, 2009, you can keep your company health insurance by paying 35 percent of your COBRA premiums—the government will subsidize the remaining 65 percent for up to nine months.

If that’s still too expensive, you may be eligible for the federal Medicaid program, or your children may qualify for the State Children’s Health Insurance Program (SCHIP). For little or no cost, this program provides insurance coverage for doctors, prescription drugs and hospitalization. Rules differ by state, but in most states uninsured children 18 and younger whose families earn less than $34,100 a year (for a family of four) are eligible. In some states, the parent of a child who receives SCHIP is also eligible for coverage.

Source: Department of Labor