Thank God I have a job with benefits. My wife was laid off from the American Heart Association a year ago and I was fortunate enough to be able to move our health benefits to my employer.
But how about people who don’t have that option? Or if both spouses lose their job (which happens more frequently than it used to)? How in the world can they afford the high cost of COBRA? What if they have (or their kid has) a chronic condition requiring expensive medication or treatments?
What do you do if you can’t pay for COBRA? Go for medicaid?
Keep in mind, though, that if someone has a chronic condition, dropping COBRA (and thus interrupting their coverage) may make it impossible to ever get private health insurance again. Plus, many states are severely restricting Medicaid eligibility due to budget problems. It’s my (purely anecdotal) experience that many families will try to cut back in other areas before dropping COBRA.
Huge. I recently experienced this. While COBRA is cheaper (generally) than getting your own individual insurance, if you’re unemployed and not sure when the next gig is going to come, it’s a daunting expense.
Good luck trying to get on medicaid. Poverty doesn’t matter. You pretty much have to be permanentlydisabled or on SSI or a state welfare program like Aid to Families with Dependent Children to qualify
No, that is completely inaccurate. Individual insurance policies are going to be much cheaper than COBRA. It is cheaper because the high cost of an HMO is offset by a deductible.
Ha. Good luck getting a “regular” insurance policy if you have any (and I mean any) medical conditions. Depending on what diagnosis you admit to, you’ll either get exclusions, unbelievable prices, or just flat denied.
No, his answer was correct if you compare apples to apples. You can opt for worse coverage and do better price-wise than COBRA (this is what I did), but it would be very unsual to see anyone get the same policy for a better price on their own rather than through a group rate, which is what COBRA is based on.
Plus, of course, any existing conditions may mean that you either keep the COBRA policy or lose coverage for your condition for some indefinite period of time, up to and including forever (or 2014, I suppose now).
My experience was that COBRA was much cheaper than an equivalent individual policy. My COBRA runs out at the of September and is $529/mo for one person. In calling around for quotes, the best offer I got was over $1300/mo for the same coverage. The COBRA is cheaper because I am still part of an employer group, whereas individual policies are not.
If I cannot get reasonable premiums for reasonable coverage, I plan to open a medical savings account with the $500/mo I am currently spending. If I incur a catastrophic hospital bill, I plan to declare bankruptcy and become a burden on society.
When the company I worked for went under, I had no access to COBRA (since if the employer’s group plan ends, so does your COBRA). No insurance company would take me at any price.
I sold everything and left the USA. That was 8 years ago. For about 3 or 4 years I had to move to a new country every 90 days since I was only on tourist visas and could not legally stay longer. I think I “lived” in about 30 countries during that time.
I still don’t know when I can go back to the USA.
As of July 1, I can get insurance in Nevada, but first I need to be re-declined by an insurance company there (no problem… except I don’t live there any more), and I also have to have been uninsured for 6 months… which means I have to drop my overseas coverage and move back to the US and be uninsured for 6 months.
The cost of COBRA was unmanageable for me. I can’t imagine what it must be like to have to insure a whole family using COBRA. This is the only time I’ve been unemployed for any length of time so I never had to worry about it before. After finding out it would be about $500 a month for just me, I chose to risk it an go uninsured for the last year. I have ended up spending about 1.5 months worth of COBRA coverage on Urgent Care appointments and treatments so I ended up ok. I’m very thankful that nothing major has happened while I’ve been uninsured. I’m also thankful that I don’t have any major ongoing conditions. My depression doesn’t HAVE to be treated. I’m just a lot happier when it is.
Luckily one of the benefits of going to college is mandatory insurance coverage so for $866 per year, I will have BCBS PPO (the same plan I had at all 3 of my last employers and which cost me about $100 per month for just me, through my employers). The insurance kicks in on September 1 and I can’t wait. As long as I stay in school, I wont have to worry about insurance again.
When my wife and I divorced she could no longer be on my company policy and had to go on COBRA for over $300/month. Since she is diabetic and takes some other medications as well, she could not get private insurance at any price. Eventually she was able to switch to a COBRA plan under a different state’s terms and lowered the cost to less than $200/month.
A friend who sells insurance says a healthy person can get private insurance cheaper than COBRA. But she was not able to help my best friend, whose family was rejected by major insurers due to very minor allergies in one family member and a past history of Xanax in another. These people don’t smoke, drink or engage in any risky behavior. Now they pay $10,000/year for catastrophic insurance of extremely limited scope.
The cost of COBRA is 102% of the cost of the original group policy that you had before becoming unemployed. Doesn’t sound like much, but this is 102% of the *combined *employer and employee cost of the benefit. So, if you were used to your employer paying the lion’s share of the benefit, you are likely in for a rude awakening. In addition, I believe you lose the tax benefits of having a group policy and must pay the premiums with post-tax money, although I may be mistaken on that.
Your COBRA policy is the same as what you had before you lost your job. IOW, you have access to group rather than individual coverage, which means you cannot be discriminated against for pre-existing conditions, and depending on the size of the employer you also cannot be discriminated on age or gender. So if you are young, healthy, single, and male, then you would probably be better off in the individual market. If you are old, sick, again male, and have a large unhealthy family, then you’re almost definitely better off with COBRA.
Most of this becomes invalid once the provisions of health care reform come into play.
I’ve purchased both so my answer isn’t an academic opinion. And I stated that the price difference was a trade off between an HMO and a deductible. The overall coverage remains the same. Actually my insurance policy has a higher total payout. The cost difference between the two policies was substantial and it paid for itself in a year to make the switch.
Sigh… no it doesn’t. You need to keep COBRA while searching for other policies because insurance companies freak out over non-coverage. Policies and deductibles are based on your background risk just like any other policy.
I’m not sure what you’re trying to say here. There are substantial price differences between policies depending on the level of coverage, which no one is really disputing. If you instead purchase the exact same policy on the individual market as is provided via COBRA (assuming that it is available, which is by no means a small assumption), there may be a large price difference depending on your perceived risk to the insurance company. As I stated earlier, if you are healthier than average, you may find a cheaper policy without sacrificing benefits on the individual market.
Of course shifting from a rich HMO plan to a high-deductible PPO or whatever you purchased will result in a huge savings. That’s just due to the nature of the two policies, not anything with COBRA and the individual market. IOW, TheFifthYear is essentially correct.
It seems to me that you are both saying the same thing here, in different ways. You want to keep COBRA while shopping for other coverage so as to not have a gap in your coverage, which if long enough allows for insurance companies to discriminate against you for pre-existing conditions (63 days I believe). Keeping COBRA while looking for a cheaper plan eliminates this risk.
When I was laid off in 2007 the cost of COBRA would have exceeded all our other household costs combined - that is, more than the total of rent, food, and fuel. That is because my company had a VERY generous insurance policy. That was great when they were footing the bill. Impossible when I had to pay for all of it.
Meanwhile, my husband has multiple chronic health conditions that require daily medication.
We simply couldn’t pay for COBRA and lost the coverage. We had no choice - we would have run out of money within three months, as in complete zero in the bank account. It would have been certain bankruptcy and then we would have lost coverage because we would have been unable to make payments.
So my husband stopped taking half his medications (which, yes, did seriously impact his health and likely led to his vision deteriorating during that time, which changes are permanent). We pieced together the rest of his daily meds through a patch work of a county program, paying out of pocket, and begging free samples from doctors. After nine months I managed to get us into a state-subsidized health insurance that, thanks to the subsidy, we could afford. It’s not the world’s greatest policy, but he gets his needed medication and it paid for three outpatient procedures he needed last year, including one to undo the damage that those nine months without proper health care had done.
I realize this will be dismissed as a mere anecdote, but you asked what happens to people and that is what happened to us.
By the way , we were some of the last people to get on that program. The waiting list for it now has twice as many people on it as the actual number enrolled in the program. Those people, have NO health insurance- you have to be uninsured at least six months just to get on the waiting list…
You have to have a High Deductible Catastrophic insurance policy in order to qualify to open an HSA. So, in the case of a catastrophic hospital bill, you’ll be covered.
We have that for our family, and it’s great. It covers stuff standard insurance won’t, like dental and optical, and we’re covered for expenses above $10,000, with no limit, either yearly or lifetime.
I encourage you to look around on the internet for HDCP plans. Ours is through Anthem, and is $334 for a family of four and a $10,000 deductible. A single person should be much cheaper, and other deductible amounts are available.
I’m not sure where the waiting period comes in. Maybe we’re talking about 2 different things. I have pre-existing health issues. There was no waiting period. Do you mean a pre-existing situation where there is active insurance money involved?
I regret not switching over from Cobra sooner. It was a huge waste of money in my case. The money spent would have covered the deductible in the first year if I’d needed it. Since I didn’t need it, it was money lost that I really could have used. Of course that doesn’t work for everybody but I would encourage people who get laid off to compare the money spent on a a COBRA HMO versus a policy with a high deductible.
Anthem quoted me over $700 for one person on a $9000 deductible and coinsurance . Oh, and since I am a cancer survivor, that is not covered. Nor are ulcers, which I had once. And there was an $87 per month surcharge because I am currently taking a statin for high cholesterol. All in all, if I had a major hospitalization, I would be out over $17,000 between the annual premiums, deductible, coinsurance and co-pays. That is still a catastrophe, and I would still have to declare bankruptcy and stop paying the premiums.