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Choosing between COBRA and Individual Health Insurance

When you leave your job, and your group health insurance plan, you have the option of taking COBRA coverage or buying your own, individual health insurance policy. Before you do, you need to determine which option is best for you.

  1. Can you get approved for individual health insurance? If you have a pre-existing condition then there is every possibility that you will not be approved for an individual policy. In that case, signing up for COBRA and avoiding any breaks in your coverage is vital.
  2. Is an individual policy cheaper than COBRA? COBRA has a reputation for being expensive – but don’t just assume that your COBRA coverage is greater than the cost of an individual policy. Instead, get the rates on comparable policies and find out the truth. Make sure you compare like policies – for instance, if your COBRA policy is an HMO plan with no deductible, don’t compare the premium with that of a high deductible plan as you will be comparing apples to oranges.
  3. Are your COBRA benefits better? There may be certain benefits to keeping your existing policy through COBRA, especially if the policy’s benefits are better than any you can get on your own. Consider those benefits that are most important to you and compare the two.
  4. Will the overall cost (premiums and treatment) be cheaper on COBRA? Let’s say you are faced with a $400 a month premium on COBRA but can get a high deductible plan for just $200 a month. That might sound great but if you have a chronic condition that requires medications, tests and doctor visits on a monthly basis, then the cost of the premiums along with your deductibles could easily – and quickly – outpace COBRA premium payments.

Don’t play with your health and well-being. Do your research and make sure you make the best decision for both your wallet and your body.

December 23, 2010

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