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COBRA Insurance Alternatives

Posted on: March 7th, 2012 by Cobra Insurance Guide

Losing or quitting your job can be very stressful and on top of that, many people face making difficult decisions about health insurance. While the easiest option for many is to sign up for COBRA insurance if it is an option, upon deeper examination many people learn that COBRA insurance can be quite expensive and may in fact be out of reach for their family. Even if it is not out of reach, an average healthy family spends $8000 extra annually by choosing COBRA insurance. Understanding what other options are out there can help both individuals and families better understand the best choice for their health care and budgetary needs.

Option 1: Individual/Family Health Insurance Plan, Average Monthly Rate: $420
Individual health insurance plans, sometimes called family health insurance plans, are health insurance plans offered through major companies like Blue Cross and Kaiser, that are essentially the same as an employer provided health insurance plan. They are the most comprehensive plans on the market in most cases and can be surprisingly affordable for families and individuals, especially when there are no major health concerns. Many people wonder why these plans can be so much cheaper than COBRA and the reason is actually relatively simple. Under group health insurance plans at employers, the health insurance plan covers everyone employed, whether they are completely healthy, have major medical issues, or are at high risk for major medical health concerns. Due to this fact, group health insurance plans are more expensive because they cover both the healthy individual, who is relatively cheap to insure, and the not so healthy individuals, who are very expensive to insure. When you are relatively healthy, you can get a very good rate on health insurance because you are low risk to the insurance company. It is always worthwhile to get a quote for health insurance before choosing COBRA because many people find that they can save up to 65% monthly by choosing a private plan. You can get a quote below.

Option 2: Short Term or Catastrophic Insurance, Average Monthly Rate: $200
For people who know that they will be employed soon and have health insurance, or for people who only want minimal health insurance because they rarely go to the doctor, short term and catastrophic health insurance plans can be very inexpensive. These plans are normally minimal with high deductibles but they protect you in case anything major happens. Most people find these types of plans for under $200 monthly and sometimes as low as $75 if they are willing to have a high deductible.

Option 3: COBRA insurance, Average Monthly Rate: $1,084
Under COBRA insurance the average family pays around $1100 to keep the exact same coverage as they had with their employer. Many times for people with preexisting conditions or major medical needs, COBRA is the cheapest and best option, since health insurance is expensive and sometimes prohibitive for people with serious health needs. However, if you do not have serious health needs, another health insurance plan will likely be much more affordable and can still provide excellent coverage.

COBRA Insurance and Co-Payments

Posted on: March 5th, 2012 by Cobra Insurance Guide

cobra-insurance-copaymentsCOBRA insurance is a confusing topic and it can be difficult to sort through all the health insurance jargon and options available to you. This is made even more difficult for most people since they have just lost or quit their job. However, understanding your health insurance options, including COBRA insurance, doesn’t have to be difficult. Once you understand the basics and what you should be looking for, the decision will get much clearer and be much easier for you and your family.

One major part of this decision and a question we hear frequently from readers is the question of co-payments and how co-pays are affected by signing up for COBRA insurance. We are also often asked how co-payments should factor into a decision to choose a COBRA insurance alternative.

First, let’s look at exactly what a copay, or co-payment, actually is. A copay is an amount predetermined by the insurance company that you must pay up front for medical services. For example, you may have a copay of $25 for doctor visits, $50 for specialists visits, $100 for emergency room visits, $10 for generic prescriptions, and $20 for name brand prescriptions with your health insurance plan. Co-payments vary between insurance companies and between services. Once you pay the copay in most cases, the rest of the cost is covered by the health insurance company. Health insurance companies started using copays to share some of the medical cost and also to prevent unnecessary medical treatment .

For COBRA insurance, copays will remain exactly the same as they were when you were employed due to the fact that COBRA insurance simply continues the previous insurance that you had. That means that if you are used to paying $10 for all prescriptions, you will continue to pay $10 with COBRA insurance. If the health insurance co-payments change at your previous employer, they will also change for you.

When looking at alternative health insurance plans to COBRA insurance, which can cost over $10,000 annually for families, many people immediately shy away from any plan with high co-payments since they aren’t used to them. But in many cases, even if you take a higher copay cost, you can still save thousands of dollars by choosing a private insurance plan. Here’s how.

Let’s imagine that by signing up for COBRA insurance, your healthy family of four will spend $1000 a month for health insurance. Included in that plan are co-payments of $10 each for prescriptions and all doctor visits. On average your family visits the doctor 20 times a year and fills 5 prescriptions. (Likely your family visits the doctor MUCH less than this!) That means with COBRA insurance, you would pay $12,000 annually in premiums and an additional $250 on copays. That means your total COBRA insurance cost for the year is $12,250.

Now let’s imagine that your family finds a private health insurance plan that costs $425 monthly (based on the national average for insurance costs) but it comes with co-payments of $100 for prescriptions and doctor visits. This number is much higher than the national norm but will help show how much you can save even with high co-payments. Given your family visits the doctor 20 times annually and fills 5 prescriptions, you will spend a total of $2500 on copays. When we add that to the annual cost of the premium, $5,100, the total health insurance cost is $7,600. You are still saving $4,650 by using private health insurance!! And that is with extremely high co-payments and more doctor visits than most families have.

Want to find out how much you can save with private health insurance? Get a free, no obligation quote and compare that to the cost of COBRA insurance below.

State COBRA Mini Plans

Posted on: December 5th, 2011 by Cobra Insurance Guide

State COBRA InsuranceMany people do not know that if they do not qualify for federal COBRA insurance, they may still qualify for a state run COBRA insurance plan, usually known as mini COBRA insurance.  These plans are meant to help people and usually cover people who work at smaller companies with between 2-19 employees.  They also sometimes extend benefits after COBRA insurance has run out.  The following states offer mini COBRA insurance programs:

State Length of COBRA in months
Arkansas 4
California 36
Colorado 18
Connecticut 36
Iowa 9
Kansas 6
Kentucky 18
Louisiana 12
Maine 12
Maryland 18
Massachusetts 36
Florida 29
Georgia 3
Minnesota 36
Mississippi 12
Missouri 9
Nebraska 12
Nevada 36
New Hampshire 36
New Jersey 36
New York 36
North Carolina 18
North Dakota 36
Ohio 6
Oklahoma 6
Oregon 6
Rhode Island 18
South Carolina 6
South Dakota 36
Tennessee 15
Utah 6
Vermont 12
West Virginia 18
Wisconsin 18
Wyoming 12

COBRA Insurance Premiums

Posted on: November 28th, 2011 by Cobra Insurance Guide

Nurse and PatientAn important part of anyone’s decision making process with COBRA insurance is understanding COBRA insurance premiums.  Here is a list of important things to know about your COBRA health insurance premiums.  Learn how to calculate your COBRA insurance premiums here.

  • COBRA insurance premiums are the full cost of the health insurance plan, without any employer help
  • COBRA insurance premiums usually cost up t0 80% than what an employee is used to paying
  • COBRA insurance premiums include a 2% administration fee
  • If COBRA premiums are not paid on time then the plan will be cancelled in most cases
  • You must pay the premiums for the entire retroactive period when you sign up

How to Find Health Insurance When COBRA Runs Out?

Posted on: September 22nd, 2011 by Cobra Insurance Guide

Nurse and PatientA reader recently wrote to us wondering what he should do when his COBRA insurance runs out.  Him and his wife have been on COBRA insurance for the last 17 months and have about 30 days to make a plan for when their insurance stops.  They are both in their fifties and they have a daughter for is 24 who is also on their health insurance plan with COBRA.

Many people find themselves in this situation and making a decision about what avenue to pursue can be a difficult one. The major sticking point for this family is whether or not anyone in their family has serious medical needs or a preexisting condition.  If so, a comprehensive private plan is probably the only way to go for those with preexisting conditions.  They will likely need to apply to multiple providers to find a health insurance plan who accepts them and that they can afford.

If no one in the family has a major medical need or preexisting condition, there are more options.  For a comprehensive plan, a private insurance provider will still be the way to go.  However, they could also consider short term, catastrophic, and indemnity plans that are much cheaper.  These plans however are very limited and often have very strict guidelines for what is covered.

COBRA Insurance Subsidies Come To An End

Posted on: September 20th, 2011 by Cobra Insurance Guide

FamilyDue to the economic recession and the large amount of people who found themselves unemployed, the government passed laws to create a COBRA insurance subsidy for people who needed COBRA insurance but were not able to afford the expensive premium.  This COBRA insurance subsidy paid 65% of the premium for anyone on COBRA who was unemployed and met certain conditions.  The government renewed this subsidy three times to extend its length and continue to assist people.

Unfortunately, this subsidy came to an end on August 30, 2011 which means that no one is eligible to receive assistance paying for their COBRA insurance benefits any longer.  If you are considering COBRA insurance but worried about the cost it is smart to look at alternatives to COBRA insurance and also get quotes from independent companies to compare rates and health insurance plans.



How to Qualify for 36 Months of COBRA Insurance

Posted on: July 22nd, 2011 by Cobra Insurance Guide

DoctorAlthough for most people COBRA insurance coverage will only last 18 months, there  are some situations where COBRA health insurance can actually extend beyond the typical 18 months.  Knowing what these circumstances are can save you and your family from having to switch insurers or experiencing a lapse in health insurance coverage.

1.  A Second Qualifying Event:  Under the federal COBRA insurance laws, there are certain events, known as a Secondary Qualifying Event” that will extend COBRA insurance coverage for an additional 18 months to 36 months in total.  The downside to this law is that it almost only extends to dependents and spouses and not to the former employee.  If the formerly covered employee becomes entitled to Medicare, becomes divorced or separated from a spouse covered on the COBRA plan, or the formerly covered employee dies, their dependents/spouses are able to have health insurance under COBRA insurance plans.  Also if a dependent child covered under COBRA loses their dependent status, they can qualify for an additional 18 months of COBRA health insurance coverage.

2.  State Sponsored COBRA Insurance:  Many states offer their own COBRA insurance programs normally known as mini COBRA plans.  In some states, these plans offer an additional 18 months of coverage to eligible state recipients and their dependents.  Learn if your state offers state sponsored COBRA insurance here.

As always, before you decide to extend your COBRA insurance coverage for an additional 18 months you should always consider alternatives to make sure you have the right coverage at the right price.

What do I do if I can not pay my COBRA Insurance monthly premium?

Posted on: April 18th, 2011 by Cobra Insurance Guide

Question KeyUnfortunately due to the current economic climate, not to mention recently losing a job, many people find themselves in a position that they may not be able to pay the full monthly premium under to continue their COBRA insurance health care.  Normally, under the current laws, if you do not pay the premium within the 30 day grace period, you will lose your COBRA insurance coverage and not be eligible to sign back up for it again.  However, there are some things you can do if you find yourself in this situation.

  1. Reach out to the health insurance provider: There is a chance that your health insurance provider under COBRA insurance will work with you to determine a payment schedule that you can keep up with.  Many companies are sympathetic to your situation and want to help you continue to keep your coverage.   It can not hurt to reach out so do not hesitate to reach out to find out your options.
  2. Consider Paying on Credit: It is extremely important to keep your health insurance, so you may want to consider paying your premium with a credit card.  You do not want to find yourself in a situation with major medical expenses and this can be a way to make sure this doesn’t happen while you seek out new employment and insurance.
  3. Consider COBRA Insurance Alternatives: Rather than just going without health insurance, you may be able to find a cheaper COBRA medical insurance alternative by exploring alternatives.  There are many different types of medical insurance options and many are significantly cheaper than COBRA insurance.


Steps to Take When You Lose Your Job and Consider Signing Up For COBRA

Posted on: April 10th, 2011 by Cobra Insurance Guide

Medical InvoiceLosing your job can be incredibly stressful, as can be the looming costs of signing up to continue health insurance coverage under COBRA insurance which can be incredibly expensive, running many families upwards of $1,000/month.  So what do you do if you lose your job and are getting ready to enroll in the costly COBRA insurance continuation plan?

  1. Reduce Costs: When you lose your job, one of the most important things to do whether or not you elect to sign up for COBRA insurance is to reduce costs.  Think about where you can cut back  – eating out less, shopping less, buying generic products, traveling less, reducing utility bills, and more – examine your budget closely and find ways to cut costs.  This will be important not only because you will have less income coming in but also because you will soon be facing an expensive COBRA insurance premium bill to keep your health insurance.
  2. Explore Other Options: COBRA insurance is not the only health insurance option out there.  There are many alternative health insurance plans that may offer less expensive health insurance plans.  You should consider individual health insurance plans, private family health insurance, catastrophic insurance, short term health insurance, and high deductible health insurance.  Explore each option carefully and compare it to COBRA.  Consider your age, health, and any pre-existing conditions or ongoing medical needs.
  3. Check out Governmental Insurance Programs: The state and federal government offer many insurance plans that can benefit adults, seniors, and children who are under a specific income level.  Check out both federal and state run insurance programs to find out who in your family can qualify.  In many states, you will find that your children can qualify for state run medical insurance plans that will dramatically cut your expenses.
  4. Consider a Spouse’s Insurance Plan: Have you thought about your spouse’s health insurance options?  You may have previously had your family covered under your plan because it was better or less expensive, but now it is time to look into your spouse’s options.  Explore the costs and enrollment time and requirements for your spouse’s insurance.  Likely it will be less expensive to add people to their plan than continue insurance under COBRA long term or find a new plan.
  5. File for Disability Immediately if it is an Option: If you are losing your job due to a disability, you should immediately file for Social Security and disability.  This will help you to get through tough times and many times help to cover insurance plans.  If you are not sure if you are eligible under Social Security or Disability law, check with the Department of Labor to learn more.

COBRA Insurance and the NFL – COBRA Insurance Benefits Employees in All Sectors

Posted on: April 9th, 2011 by Cobra Insurance Guide

COBRA Insurance and the NFL – COBRA Insurance Benefits Employees in All SectorsIn wake of the recent NFL lockout for many teams, many NFL players find themselves  in the same situation as many Americans, concerned about their own well being and the well being of their families, as they find themselves without a contract and on the verge of a stretch of unemployment. So what are these players doing, the same thing that many Americans do when they find themselves in the same situation.  Players on many teams, including the Miami Dolphins and Tennessee Titans are signing up for COBRA insurance to keep themselves and their families protected until the end of the lockout.  Stevens, a player on the Titans recently said in an interview with the Tennessean said “”It’s definitely a risk and it stinks. Most of the guys have their Cobra insurance. We’re paying for our insurance. But it stinks if you get hurt. We’re preparing for the season, but the team has no liability towards us.”  So what can we learn from this?

We can learn the same thing these players are learning.  That in times of uncertainty, when we are unsure what our future employment situation holds, COBRA insurance is a great interim insurance option to keep yourself and your family protected.  COBRA insurance, although sometimes costly, ensures that we maintain coverage through uncertainty and protects us.  That is why the bill was passed by Ronald Reagan in 1985 and why for so many of us it continues to be an incredibly important piece of legislation.

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