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Sunday, February 1, 2009

COBRA insurance alternatives

By Jeff Cline

Carmen knows that going without health insurance can be a financial disaster to her family, so when she lost her job as a sales person she looked at all her options. Carmen has no idea how long she may be out of a job so she does not want to go uninsured.

She has been offered COBRA insurance from the employer she left. It is very expensive and she fears she can not afford that. COBRA states that you can keep your employer sponsered insurance for up to 18 months and is offered by employers with 20 or more employees.

The reason COBRA is expensive is due to a few things. First, you pay the total premium (what you had paid, plus the employer contribuation). Second, they often add administrative fees on top of that.

Before opting out of COBRA you should loo at your health. Carmen has high blood pressure and has to take 2 medicatins. She is also expected to make regular visits to her doctor. Her husband however is very healthy!

Pre exisiting conditions are excluded on temporary health insurance plans. So Carmen may decide to take the COBRA to cover her high blood pressure. Since Jose, her husband is healthy she can find an affordable temporary plan for him.

Health is one of the factors to consider when looking into COBRA alternatives. But there are a few more things to consider. Here are just a few:

1. You can typically only purchase temporary health insurance for a short amount of time. 6 months to a year max. So if your period of being uninsured is prolonged you could find yourself looking for other alternatives.

2. Due to the pre exisitng exclusions it temporary health insurance may not be the best option. You also have to think about if you opt for temporary insurance and then you find yourself needing more time. If you have contracted an illness in the original term, it will not be covered in the new term.

3. Temporary health insurance typically have high deductibles. These plans are meant as a sfeguard. Just in case you get an illness that has much expense. It is not meant for the occasional office visit, so you can expect to pay that out of your pocket.

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