Should You Keep Your COBRA Insurance?

COBRA is an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1985, meant to allow people to extend the health insurance that was provided by their employer when they lose their job. With more and more people joining the ranks of the unemployed or underemployed, COBRA has allowed them to remain insured. However, the price tag is hefty and you may be better off dropping this type of coverage.

When is COBRA a Good Deal?

If you have a chronic health condition that would make it difficult for you to get insurance, COBRA coverage will buy you the time you need to shop around for an affordable health insurance plan. Although it can be quite expensive, having coverage while you search for another plan can save you a lot of money in the long run if you are hospitalized or need expensive medications.

While you are covered with COBRA, use the internet to get several online quotes from insurance companies that might cover your health care needs. Compare the benefits and drawbacks as well as the cost of the premiums and decide which one is best for you.

It's essential to have health insurance. Even a bare bones policy is better than nothing and can make the difference between financial security and losing everything you've worked so hard for, even your home!

Should You Take Advantage of COBRA?

If you are being treated for an ongoing health issue you can't afford to be without insurance. Pre-existing conditions can make it very difficult to get health insurance and you might need a few months to find a plan to cover you or a family member with a pre-existing condition.

Likewise, if you know that your next job won't provide health insurance you should continue COBRA coverage. If there isn't another job waiting for you when your employment is terminated or your hours are cut so much that you're ineligible for employer provided health care coverage, you'll need to extend your insurance through COBRA.

Start Shopping for an Alternative Now

People who contribute to their health care through an employer's plan usually don't know how much they are saving. Perhaps they are paying about $200 per month for their insurance but the policy actually costs about $500 a month with their employer making up the difference. That can be a budget buster if you're unemployed and have to pay the full amount through COBRA!

Start by comparing prices through online quotes. Price is important but there are many other things to take into consideration. See if your doctor accepts a plan you are considering. If you're not willing to change health care providers, look for a plan that he or she accepts.

Does the plan you're considering accept your pre-existing condition? If not, they may have a period of time after which they will cover it. Read the terms and conditions of the policy to find out their willingness to cover your condition or that of a family member.

Some policies won't cover pregnancy and childbirth so if not done adding to your family or haven't started yet, be sure that a prospective insurer will cover that.

At some time in your life, you or a family member will probably have to use the emergency room or an urgent care clinic. These can be quite costly so be sure you know what your policy covers. Their definition of an emergency may be quite different from yours so be clear on exactly what is covered. Some insurers even demand that your physician authorize a visit to the emergency room!

Do the policies you're considering cover preventative health care? Screenings and tests can cost a lot of money and having your insurance pay for at least a portion of these charges can be very helpful. What about prescription drug coverage? Most of us can afford the occasional antibiotic but if you need a monthly prescription drug to maintain good health you should probably make sure that its cost is covered by your policy. If you have a history of disease in your family, even if you are very health conscious, you should probably make sure that you have drug coverage.

Saving On Health Insurance

Your COBRA coverage may be more than you actually need and are willing to pay for. It is a policy your employer bought to cover everyone in the company and probably contains coverage you don't need.

You can save a lot of expense by choosing a plan that pays for surgeries and hospital stays but leaves it up to you to pay for office visits and ordinary illnesses. You can also save by choosing a higher deductible and opening a health savings account (HSA) that not only helps you pay medical bills but is tax deductible as well.