Selling the new COBRA plan

Kim Morris | April 22, 2009

The sales team for the Obama plan to sell health insurance to the unemployed hits the road this month. A series of public seminars presented by employees of the U.S. Department of Labor will focus on recent changes to COBRA law and address employers' concerns about the cost of the 65% subsidy. The two day seminar is scheduled locally at Essex County College on April 22-23.

MedSave.com previously commented that we expect lackluster response to the new COBRA program, both from employers and employees. It just is not what either needs at this point. COBRA has never been a highly utilized program, with only about one in ten eligible individuals participating. The 65% premium subsidy will undoubtedly boost participation but it is still unlikely that the program will appeal to a majority of those eligible. The underlying problem, in our opinion, is that the insurance offered by employers is not the type of coverage that appeals to laid off workers. The more popular types of insurace used by unemployed individuals from MedSave.com are less expensive, but usually do not qualify for the 65% premium subsidy. "It is like shooting ourselves in the foot" said one health plan administrator struggling to advise people on their choices. A detailed comparison of COBRA and COBRA alternatives can be found at www.COBRAplan.com.

If, in fact, the new voluntary enrollment COBRA plan turns our to be a flop then this will add fuel to the call for federal requirement for everyone to have health insurance.

Tags : obama reform proposal

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