I was laid off from my job last month, and this week I received the COBRA information for continuing my health insurance. The cost? $1200 per month! :mad:
So tonight as I tossed and turned in bed thinking about it, I came to the computer and looked up a couple of insurers, including the provider I had through the old company. They listed plans around $300 per month. That obviously sounds a lot better.
So why on Earth would I pay this $1200? I assume it comes down to pre-existing conditions, right? If I’m insuring 4 presumably healthy people, is it safe to get something else? I’ll obviously be making phone calls on Monday, but I thought if anyone had any info in the meantime maybe I could get some sleep tomorrow night.
Have you compared benefits, copays and deductibles of the two plans? The cheaper plan is probably a catastrophic insurance policy with a high deductible and copays.
Fear Itself makes a good point about comparing the policies.
However, you are also right to be thinking that if you are insuring 4 healthy people you may have better options available. If you are healthy, you can pay a lot of copays for $900/month.
You may also want to consider what the independent policies’ options are for cancelling your coverage or raising the premium, which is somewhat influenced by state law. COBRA is yours for 18 months as long as you pay the premiums on time. This would mainly be a consideration if you had a large claim and you were between jobs that offer insurance for a long time.
You are absolutely right that pre-existing conditions is the key.
In my experience, COBRA’s greatest value is in maintaining continuity of insurance between jobs, or between policies. You were laid off last month, which means unless you pay the COBRA this month, you will have been without continuous coverage. This isn’t a big deal if you’re healthy and remain healthy during the gap in coverage, but if you have a diagnosed medical condition, it is a very big deal. Most health insurance policies have exemptions for pre-existing conditions. Which means that they don’t have to pay for treatment of claims arising from those medical conditions which were diagnosed prior to the policy start date.
My understanding is that if health insurance is continuous during the transition (meaning one policy did not end before the next one started), pre-existing conditions can not be excluded. COBRA, while expensive, is a means to bridge the gap when employment has been terminated without enough notice to acquire replacement health insurance coverage.
This saved my ass a few months back. I was laid off from a job in July & got a new one in September. In February (5 months after the new job/insurance), I was diagnosed with heart disease & needed an angioplasty. Because of the continuity of coverage, my new insurance covered the procedure.
A good thing, too, since the hospital billed $34,000 for it. The insurance paid only about $13,000, but that’s another story.
