Taking your COBRA health insurance option can be a mistake!

Many people are laboring under a very popular misconception. They often believe that the COBRA health insurance plan offered by their former employer is better than any private medical insurance policy that they might get on their own.

Because of this belief they fail to investigate their options with individual or family health insurance policies that they can purchase on their own. Many would be surprised to learn that companies like Aetna, Blue Cross Blue Shield and United Healthcare that offer group health insurance to large and small employers also offer policies that can be purchased by individuals who are not part of a group.

These policies may not be identical to the policies that they offer to their group insurance clients. However, they often tap into the same network of doctors and hospitals. They often have very similar benefits.

COBRA Insurance plans are often more expensive than private plans!

COBRA health insurance can cost more than private health insurance. This again often comes as a surprise to the average consumer who has never shopped for health insurance on their own.

COBRA gives you the right to participate in the group health insurance plan that your former employer offers to its current employees. This makes COBRA a group health insurance policy. Group health insurance policies, and therefore COBRA health insurance policies, often cost more than individual policies.

We are used to things bought in larger quantities costing less. A gallon of spring water costs less when purchased in gallon container than when purchased in several smaller ones. A group that purchases a block of tickets to an event can expect to pay less per ticket than an individual would pay when purchasing a single ticket.

Health insurance doesn’t always follow this pattern. In many states a group health insurance policy has to be offered to all employees regardless of their health status. This means that the insurance company can have higher costs associated with those policies. They of course pass those costs along to the consumer.

Although an insurance company cannot drop a policy holder just because their health has worsened AFTER they purchased, they are usually able to be selective about new applicants. They will deny those who have current health problems. This lowers their cost and the cost if private health insurance.

Accepting COBRA can prevent you from qualifying for health insurance in the future!

COBRA is short-term health insurance

The answer to the question “how long can I carry cobra insurance after my job loss?” is usually 18 months although it can be longer in certain circumstances. This usually means that if you take your COBRA health insurance option you will need to find another health insurance policy or be without coverage 18 months from when your COBRA began.

Should you or one of your insured family members develop a significant medical condition during that time period, you or that family member may not qualify for an underwritten medical policy when your COBRA eligibility ends.

This can mean that taking COBRA prevents you from buying another health insurance policy!

There are situations were taking COBRA is your best options. However, if you are healthy and your family is healthy, you will probably get a lower price by shopping around and finding a good health insurance policy that you can purchase directly from a quality health insurance provider.