Advantages and Disadvantages of COBRA Alternatives

The premium costs for someone contemplating purchasing health insurance under the provisions of COBRA can be prohibitive. Perhaps that is why only 20% of eligible people choose to enter the program. Many of these people are living on unemployment compensation, which makes the idea of paying high health-insurance premiums seem completely out of reach. The people that do not opt in to the COBRA program choose to purchase private insurance plans, or choose to have no insurance plan at all.

The law does not give people much time to make a decision about whether or not they want to use their benefits under COBRA. They only have 60 days after employment separation before eligibility ends. Choosing to purchase private health insurance is a good option for most of these people.

Here are some of the advantages of using COBRA alternatives:

·Premiums are usually less expensive for private health insurance than for premiums under a COBRA sponsored plan. Saving money is important, especially for people who are surviving on unemployment compensation.

·People can choose from a variety of different health care plans. Health insurance agents often have a variety of plans available to people who need insurance. The options and prices vary from company to company. Shoppers decrease premiums by choosing plans with high deductibles and preferred providers.

·Health insurance agents act as liaisons and advocates between the health insurance companies and their clients. They can advise clients on coverage options that are suitable for their needs. Having someone to explain the ins and outs of complicated health insurance process is perhaps the best part of having a health-insurance agent.

Disadvantages of using COBRA alternatives:

·Policies may not have coverage that is as extensive as an employer sponsored health care plan. Conditions like prenatal care and pregnancy are sometimes excluded from private health insurance plans. Employer-sponsored plans usually cover these conditions.

·Private health insurance plans often have exclusions for pre-existing conditions. An employee who continues under their form employer sponsored plan usually does not have a problem with pre-existing conditions being excluded.

·Higher deductibles are common with private health insurance plans. This means the covered person will have to spend more out of his own pocket for certain conditions and treatments.

The disadvantages are relatively few for plans offered through the private sector. In fact, the advantages far outweigh the disadvantages for most people. Those who want to shop for a health-insurance policy need to act quickly to find an agent or company that suits their health insurance needs.

COBRA Alternatives Save Money

Once a person becomes eligible under COBRA, they have 60 days to make a decision about whether they want to continue coverage or not. If they decide they want coverage, COBRA allows them to continue coverage under their former employer group health insurance plan for up to 18 months. Premiums can be as much as three times the amount they paid while employed because the former employee is now responsible for 102% of the premium cost. Most of the time, it is prohibitively expensive. Maybe that's why only 20% of eligible people elect to continue their health insurance benefits.

Fortunately, there are alternatives that can save people money. Health insurance agents have many different options they can present to people seeking health insurance. They are licensed professionals who are educated and experienced in dealing with healthcare insurance questions on a daily basis.

Here are just a few options that are available:

·Aetna is one of the largest insurance companies in the United States. They offer health insurance coverage in many different states. Aetna has group plans customized for the differing needs of the employers that buy group health insurance through the company. The cost and plans vary significantly depending on individual state laws and business needs. Aetna does business in the private sector as well.

·Blue Cross and Blue Shield are two names that are widely recognized around the United States. They offer health insurance to both companies and individuals. Because they are nonprofit companies, the rates are usually much more competitive than those offered by other companies.

·Short-term health insurance can be a very viable alternative for those who are in between jobs. Often, people are without insurance for only a brief period of time. Once they get a new job, they will be eligible to enroll in the group health care plan offered by their new employer. Short-term health care insurance is sold by many different companies and can be purchased by individuals through an independent health insurance agent. Coverage on these plans is usually very affordable, but does have its limititations.

Obviously, people need to seek the services of a professional licensed health insurance agent that does business in their state. They can provide free quotes and valuable information to help people make the right health care decisions relevant to their own unique situations.