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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.

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