Where to Turn If COBRA Costs Too Much

As the economy continues to struggle, many companies are still laying off workers. And with the loss of employment, many workers are losing employer-covered health insurance.

For most of the newly unemployed, continued health insurance through COBRA may be an option. The term COBRA comes from a provision in the Consolidated Omnibus Budget Reconciliation Act of 1985. However, at an average cost of 102% more than the group plan price, those who are watching their expenses may be forced to choose other alternatives for health insurance coverage.

In some instances, eligible COBRA participants may be able to opt for a lower-cost plan. For example, if a person’s previous employer offered a preferred provider organization health coverage plan, then the COBRA premium may be reduced by going with a lesser amount of benefit. Oftentimes, though, this is still not enough. Another option is to seek out individual or family coverage through an insurance company.

Some ways of reducing the premium on these policies include opting for a larger amount of deductible or for a lower amount of overall benefits. In addition, you are often given a discount for paying the policy premium quarterly or annually, rather than monthly.

A temporary health insurance policy may be another way to go, especially if you plan to get a new job in the near future. Temporary plans offer benefits for only a short period of time, but they could provide the coverage that is needed to fill in the gap between employment, while giving you peace of mind.