What You Need to Know About COBRA and COBRA Alternatives

The economy is in the worst situation in over 30 years and people who cannot afford expensive COBRA benefits need a COBRA alternative. Some say that things have not been worse since the Great Depression. Analysts expect the unemployment numbers to rise to levels of anywhere from 9 to 10% of the population. When anyone loses a job, finding a new position and surviving financially are most important on the list of priorities. Where does health insurance fit into this picture?

Budgeting health insurance premiums into a reduced paycheck can be difficult at best. Obviously, people need a place to live and food; however, one night in a hospital can end up costing several thousand dollars. This creates a difficult dilemma for those who are unemployed. Where do people go to find help? Here are a few options people can consider when faced with a difficult situation like unemployment:

·People need to look at their income and expenses. Putting it all down on paper can help a person identify if there is any money left in their budget to include a health insurance premium. If there is room for health insurance, that is good news.

·If there is any room in the budget for health insurance, seek the advice of a professional. Friends can be a source for referrals. Their advice can lead to meeting a trustworthy ally for insurance needs. Call the recommended agents as well as others. Contact professional associations who sometimes offer insurance at a discount. Check with the state Medicaid office to see if that is an option.

·Before meeting with any agent, decide what the priorities are for an insurance policy. Is it more important to have prescription drug coverage? Is there a need to cover doctor visits? Sometimes the most inexpensive policies cover catastrophic hospitalization for accidents and illnesses only.

·Set up a meeting with an agent. While there, make sure every question on the list is answered. The agent will discuss insurance needs based on the information presented to him or her.

·Possible options that can reduce premiums include temporary health insurance, higher deductibles, HMOs, and PPO plans. Temporary insurance policies last anywhere from 6 to 18 months. These policies often have several exclusions that permanent policies do not have such as pregnancy, but their main benefit is that they are inexpensive. Membership in an HMO or a PPO is usually less expensive than traditional insurance policies, yet they have good coverage for the price. Increasing deductibles reduces insurance premiums.

Ultimately the unemployed person is the only one who can decide what the best option is for his or her situation. The only option may be to go without health insurance, but only as a last resort for survival.
When Unemployed, Should People Choose COBRA or a COBRA Alternative?

Unemployment is on the rise and people have to make difficult choices about COBRA and COBRA alternatives. When faced with a job loss, the last thing that people want to worry about is their health insurance. In 1985, the federal government acted to protect the unemployed. They put a law into place that requires employers with more than 20 people to allow eligible participants to continue on the company health plan in the event of the death of a sponsor, a divorce, a reduction in hours required to qualify for health insurance, or a job loss. They called it the Consolidated Omnibus Budget Replacement Act, also known as COBRA.

People who are unemployed must guard their budgets carefully. Health insurance may be regarded as a luxury. In reality, people should regard health insurance as an important part of their strategy to protect their financial future. There are two options available for people who are unemployed in relation to insurance. They can choose to continue with their employer-sponsored health care plan, enjoying all the benefits that were available to them while they worked, or they can choose to find a private health insurance plan. The right choice depends upon the unemployed person’s personal situation.

COBRA is the best and often the only health insurance option for people who have pre-existing and chronic conditions. A person with heart disease will find it impossible to find health insurance in the private sector. Other serious diseases such as diabetes or cancer are also included in the high risk category as far as insurance underwriters are concerned. However, other people in the family can still find coverage on a private policy.

Recent health problems can potentially be a sign of more problems to come. Expensive medications can be cost prohibitive without the right kind of insurance. People in these situations may feel more at ease with the comprehensive benefits covered through COBRA. If cost is not an issue, keeping current benefits in spite of the high premium may be preferable to some people.

When should people consider a COBRA alternative? When cost is an important part of the decision-making process, the unemployed person should seek private health insurance at a lower cost than their COBRA benefits. All people moving onto a private health insurance plan should be relatively healthy and have no recommendation from a doctor to get a surgical procedure.

Health insurance options are a private decision. Only the unemployed person and their family members can make the right decision about their healthcare insurance.