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On November 5, a bankruptcy judge approved Kodak's plan to end healthcare coverage for more than 65,000 Kodak retirees and their dependents.
A majority of Kodak retirees are over 65 years old and qualify for Medicare. They will have the option to purchase supplemental insurance through a variety of insurance providers.
However, the population of retirees hit hardest by the ceasing of benefits is those who are younger than 65 years old and not eligible for Medicare. These retirees will have the option to get insurance through the Consolidated Omnibus Budget Reconciliation Act or COBRA. However, the costs could be four times more than what the retirees are used to paying under Kodak's benefits.
According to the Eastman Kodak Retirees Association, under COBRA, retirees can continue to get the coverage they've had with Kodak. However, the retirees will have to pay out-of-pocket.
Retiree Marty Pinto says he paid about $91 each month for his health insurance. Under COBRA he will have to pay around $400.
"The way the healthcare was with Kodak it was doable and I was paying about $91 a month," Pinto says. "Now I'll be paying about $400 per month. With the small pension I had, it was livable, but now my pension is only going to be half of that."
Karen Leskovics worked at Kodak for 35 years. She says she paid about $591 a month for health insurance for herself, her husband and her two daughters. Under COBRA she will pay around $1,400 each month.
Leskovics says she considers this too expensive but feels she has no other choice but to go with the COBRA option. She's been told it's still the cheapest option.
"There are options other than COBRA, but the problem is that virtually all of them are very expensive just to get the same coverage," says George Conboy of Brighton Securities. "Kodak has such a large group of retirees that they are able to negotiate a lower cost. If individuals go out on their own, it will more expensive."
Earlier this year, Governor Andrew Cuomo signed a piece of legislation drafted by Assemblyman Joe Morelle and Senator Joe Robach. The bill gave EKRA the ability to negotiate with insurance providers by having the group recognized as a community. The idea was to give EKRA more buying power to purchase cheaper insurance as a group.
EKRA president Art Roberts says the bill had good intentions and would have been useful if COBRA wasn't an option, but Roberts says insurance companies like Excellus BlueCross BlueShield and MVP were not able offer rates competitive to COBRA rates.
An Excellus BlueCross BlueShield spokesperson also says the company explored the possibility of putting together a package for EKRA members, but found it was more expensive than COBRA.
Retirees like Pinto have come to accept his new financial burden. While he's upset, he says there is little he can do. COBRA is his only option and he has six more years before he is eligible for Medicare.
"It's a very long [time from now]," he says. "We were planning to have my wife retire, but unfortunately, she doesn't get any healthcare so that's going to raise our costs even more when she leaves. I have to start looking for something. It doesn't have to be a full-time job, but it would nice to find a part-time job."
Retirees can stay on COBRA as long as Kodak continues to provide insurance to current employees and as long as Kodak remains a company.
For more details on 2013 COBRA rates, click here.