Understand COBRA

Getting COBRA health insurance may be an easy and convenient option but it’s not necessarily the cheapest option. You should always consider researching independent health insurance using a search engine like eHealthInsurance, named 2008 Best Health Insurance Site by Kiplinger’s, because you probably can get it for cheaper. The company searches through all the major health insurance providers like Blue Cross Blue Shield, Aetna, etc. and gives you a variety of options from HMOs to PPOs to simple indemnity.

The reason why COBRA is so expensive is because you get the same insurance but you have to pay the entire price. With employer provided health insurance, the employer subsidizes some of the cost of that insurance.When the employer stops paying for half, the price usually goes up a tremendous amount.

There are a few reasons why you might want to stick with COBRA, at least until it expires:

• You have a pre-existing condition. Since you must be covered by your employer’s plan until COBRA expires, you don’t have to pay increased premiums or have to deal with exclusions because of a pre-existing condition. When you have employer provided insurance, the insurance company is required to cover the entire class (the set of employees is considered a class) and so the added estimated cost of your pre-existing condition is averaged across all in the class. When you are a class of one, you pay the full price of your condition.
• It’s easy. You have 60 days to elect COBRA, so many people wait out the 60 days to see if they need it. if you do, elect it retroactively and get your insurance needs met.
• It’s cheaper. Independent health insurance isn’t necessarily cheaper, sometimes COBRA is. However, it pays to do the research.