Have You Considered These Alternatives to COBRA Coverage?
So, you just lost coverage through your employer. What do you do now?
Life happens. You may have lost your job, decided to work for yourself, or started a new career, and you no longer have health insurance. If you qualify, your former employer will offer you what is known as COBRA , which is a continuation of your current plan. The problem is COBRA coverage is often extremely expensive. But don’t worry there are other options out there that can help you stay covered.
So how do you decide if you should continue with your current health insurance plan through COBRA or find a different option?
COBRA in theory is a great option. Being able to continue your current insurance that you are familiar with can make work transitions easy. Unfortunately, because your former employer does not subsidize COBRA premiums, you will pay much more, up to 102% of the cost of the plan . In fact, many people eligible for COBRA simply can’t afford the premiums.
For those of you who for whom COBRA is too expensive, you may want to consider some of the alternatives available like Obamacare, short-term health insurance, health care sharing ministries, and health benefit insurance. These options generally are more affordable and can be more adaptable to a consumer's’ situation.
Obamacare has changed the way individuals purchase health insurance. You can now log on to Healthcare.gov or your state’s health insurance exchange to buy a quality health insurance plan, and you may even qualify for a subsidized monthly premium which can make it more affordable than COBRA. Consumers who choose this option need to act quickly. You will only have 60 days from loss of employer-based coverage to secure qualify for a special enrollment periodoutside of the annual Open Enrollment Period. Obamacare plans are not without their issues, though. Monthly premiums are often high without a subsidy, networks are narrow, and many insurers have pulled out of this market altogether, meaning fewer insurance plan options for consumers.
Short-Term Health Insurance
Another popular option is short-term health insurance (STM). Like Obamacare, STM plans are considered creditable coverage, which is very important during this time of healthcare reform. The most notable difference between Obamacare and STM is the price. Short-term health insurance can cost half as much as an Obamacare option. You can sign up for an STM plan at any point during the year, and coverage can start in as little as one day.STM is not without its limits. Plans currently cannnot exceedthree months, so you have to reapply for a second plan if you need longer coverage. Typically, STM does not cover benefits like preventative care, whichObamacare plans do. In addition, your application for STM can be rejected based on your health history and it will not cover pre-existing conditions.
Health Care Sharing Ministries
Health Care Sharing Ministries plans are technically not insurance but a group of individuals and families who have joined together to share the cost of healthcare across the group. Members must agree to live by certain religious or ethics codes, such as limited tobacco and alcohol use. Generally these plans do not discriminate based on age, weight, or health history. Members are not limited to any network and may seek providers both in and out of state. Health Care Sharing Ministries can exclude pre-existing conditions or cover them at a staggered rate. These plans donot cover services such as mental health benefits.
Health Benefits Insurance
Health Benefit Insurance (HBI) is a form of indemnity medical insurance and has been offered to by insurance companies for over six decades. HBI plans will pay a fixed cash benefit to members in the case of covered medical event requiringa doctor visit or hospital stay. HBIt plans are often combined with supplemental insurance products such as accident or critical illness insurance, as well as supplemental non-insurance services such telemedicine.