Filling the insurance gap

Minnesotans who lose their jobs could have an alternative to costly health insurance coverage through the federal Consolidated Omnibus Budget Reconciliation Act (COBRA).

The House Commerce and Regulatory Reform Committee approved HF1397 April 29, sponsored by Rep. Glenn Gruenhagen (R-Glencoe), and moved it to the House floor. Sen. Paul Gazelka (R-Brainerd) sponsors a companion, SF1158, which awaits action by the Senate Commerce and Consumer Protection Committee.

Under COBRA, a terminated employee enrolled in the employer’s health plan may continue that coverage by paying the full premium costs. The bill would create an individual health insurance policy, called a GAP policy, for “Guaranteed, Affordable, Portable,” which is intended as a temporary alternative for people between jobs.

“Taking on a new payment as large or larger than their mortgage payment is quite difficult when (workers) become unemployed. For example, state employees covered under the health insurance plans face an annual COBRA premium cost in excess of $16,000 annually if you lose your job,” Gruenhagen said. That amount would be for family coverage.

The bill would require employers’ health carriers to offer three GAP options with various deductible amounts, besides the standard COBRA option.

“Having been in health insurance as long as I have, these last years when the premiums have gotten to where they are, I have literally had people crying in my office when they look at their COBRA premium, especially in that 50 to 64 age bracket,” Gruenhagen said.

Because the proposal is still in the idea stage, there isn’t a basis for determining what the premiums would be, which is one reason Robert Commodore, the Commerce Department’s senior director of consumer and industry services, expressed concern about the bill.

“The concern we have right now is the cost of these GAP policies is unknown. We’re not sure how they’re going to be rated,” he said.