Blonch

Costly COBRA

With increasing layoffs, and unemployment, lots of folks are faced with health insurance choices under COBRA provisions that offer you continued group benefits at your own cost, at least for a while. However, the full cost on those plans can be surprisingly high. If your COBRA coverage is too expensive, rather than going without health insurance, there are some alternatives.

COBRA Alternatives

As alternatives to COBRA coverage, you can look at:

• government subsidized insurance programs (CHIPS, etc…)
• individual plans
• temporary health insurance

Government subsidized insurance programs target children, but can also cover families. There are eligibility guidelines for income and assets. Individual plans have underwriting requirements, but you can probably show evidence of continuous coverage from your group plan that is terminating you, and that will help. If you hope to get back in a group plan within a year (we can hope, can’t we?) you should look at temporary health insurance. The coverage isn’t as broad as most group plans, and high deductibles are probably most cost effective, but temporary health insurance can protect you from catastrophic loss during your unemployment.

Limitations of Temporary Health Insurance

One drawback to most temporary health plans, besides the underwriting questionnaire, is that you need to determine how long you are going to need the coverage up front. Some even require the full premium payment at policy inception. This can be a financial challenge as well as a prognostication challenge. And there may be issues with pre-existing conditions. Temporary health plans don’t work for everybody, but if they fit your situation, you should at least consider them. Some insurance agents specialize in this kind of coverage.

Filed under:
Insurance by PecosJack