Finding health coverage after a layoff

NEW YORK — Cynthia Casey's husband was in the hospital with a failing liver when she was laid off in September, stranding the family without health insurance.

Medical bills were piling up. She had two teenagers to feed and a weekly unemployment check of less than $300.

"The bills just were not getting paid," said Casey, a 50-year-old resident of Pompano Beach, Fla., who until recently worked as an accounts-payable supervisor.

Across the country, the loss of nearly 2 million jobs in the past year is stirring anxieties about how to find and pay for health insurance on your own.

The price is steep with nearly any option, but pales in comparison to the financial calamities that await the uninsured.

Still, half those who were unemployed and looking for work last year didn't have insurance, according to the Kaiser Family Foundation, which studies health policy. The nonprofit also estimates that a 1 percent jump in the national unemployment rate translates to an additional 1.1 million uninsured. Last month, the unemployment rate rose to 6.7 percent, up from 4.7 percent a year ago.

The Caseys eventually ended up on a state plan that offers limited Medicaid coverage, but it's not enough to make ends meet.

To help you plan in the case of a layoff, here are the health-care options you'll want to consider.

COBRA

Workers are entitled to extend health-care benefits for 18 months after leaving a job under COBRA, which is an acronym for the Consolidated Omnibus Budget Reconcilation Act of 1985.

The catch is that employers no longer pick up a share of the premium, which on average is 84 percent. So you'll likely see a dramatic price increase.

"For many employees, it's the first time they realize the full cost of health insurance," said Diane Rowland, executive vice president of the Kaiser foundation, based in Washington, D.C.

The average annual premium for an employer-sponsored plan is $4,704 for individuals and $12,680 for families, according to the Kaiser foundation. You can also be charged up to 2 percent of the premium for administrative costs under COBRA.

The act covers those who worked at companies with 20 or more employees, but several states extend eligibility to those at smaller firms. You also need to be enrolled in a health plan at the time you were laid off.

The other stipulation is that the company still offers health coverage, so you're out of luck if your employer goes under or stops offering health insurance to cut costs.

If you don't enroll right away and have a medical emergency, you can still sign up for coverage if it's within 60 days. But you'll be required to pay for coverage starting from the time you left your job.

Individual plans

What you can expect to pay for an individual policy varies based on your age, health and where you live.

Cigna's Web site, for instance, quotes monthly premiums ranging from $127 to $230 for a 30-year-old female in Dallas. That's assuming she doesn't smoke.

For a 50-year-old female smoker, premiums more than double, ranging from $274 to $481.

Older individuals not only face higher prices, but may find it difficult finding coverage at all. Only 71 percent of applicants age 60 to 64 were offered coverage in 2006-2007, according to a study by America's Health Insurance Plans, an industry group.

Those with pre-existing conditions may also find it tough securing coverage.

Individual plans may also be more limited than the group plans offered through employers. For instance, maternity care or prescription drugs may not be covered, so it's important to review the plan carefully before signing on.

For those who can't get coverage on their own, several states run "high-risk pools" that let people buy coverage, but typically at higher prices.

Government plans

Even if you're not eligible for government programs, you may be able to get coverage for your children.

In most states, the Medicaid eligibility threshold for children is set at twice the poverty level, or about $42,000 a year for a family of four.

The requirement is usually stricter for parents, however. Unemployment benefits are sometimes enough to disqualify adults, according to the Kaiser foundation.

If your income is low enough, however, you may qualify for more limited government help. Casey, of Pompano Beach, for instance, is enrolled in Florida's Medically Needy program, which requires participants to pay a certain amount of medical bills each month before state assistance kicks in.

Senior citizens and the disabled may be eligible for Medicare. There's at least one bit of positive news, the monthly premium for the Medicare program that covers physician and outpatient services is expected to hold steady at $96.40 next year.