COBRA insurance is the standard temporary insurance available to you after you quit or leave your current job. Most people assume it’s the only temporary insurance policy available so they just select it after their companies insurance policy expires (typically at the end of the month you quit).
I’ve used COBRA in the past and never needed to file a claim. Since I recently left my job and need a temporary 3-6 month insurance policy, I’ve began looking for a lower price alternative. COBRA quoted me $384 a month as a low risk single male! That was motivation enough to begin my search.
I was at Barnes and Noble last night and came across an entire book written about low cost insurance plans. I honestly don’t know how they could fill an entire book with this and preferred just the Cliff Notes version which didn’t exist.
After skimming through the chapters, I found what I was looking for. A gem website called eHealthInsurance.com which is basically an aggregation of short-term (or long-term) personal or small business insurance policies. Bingo!
I checked out the site and filled in a simple form and was instantly quoted 10-20 different rates. For example, Blue Cross came up as a “Best Seller” but had a $2,000 deductible but there were other plans with little to no deductible. Regardless, this quote is over $300 less a MONTH than what COBRA was quoting me. Knowledge is power my friends.
It appears COBRA is finally catching on that it’s plan is way too expensive and other companies online are taking advantage of this. To combat the competition, COBRA has introduced a “COBRA Alternative” which provides you with a custom quote in a similar way. I’d recommend you get quotes for both sites and see which works out best for you and/or your family.
Update 3/22/2010 – I left my old job to start my own company and again need my own insurance policy. It’s been three years since I last used eHealthInsurance.com and this time the rates were higher (of course).
Part of this was due to it being three years but another major part seems to do with the struggling economy and Medicare. Obama is working on getting this fixed for the elder folks but it doesn’t look like I’ll benefit from it.
I received my COBRA paperwork and my monthly rate would be $800 to continue the same coverage I had at my previous employer. All I can say is “Wow that’s expensive!”. Then there was a page included talking about subsidized health insurance (brought to you by Obama) and I needed to apply for it. The price (if I qualified) would be $350 a month instead of the $800.
I was all over it and filled out the form and mailed it in. Two weeks later I received it back in the mail and I was denied. Reason being was that I voluntarily quit my job. What a load of crap. I could appeal but apparently anyone who quits their job doesn’t qualify for the “Obama rate”.
So it’s been over two months now and I have yet to pay for COBRA or any other health insurance plan. I actually applied again using eHealthInsurance.com and got a pretty decent quote but after a couple additional phone calls for more information, I was re-quoted a ridiculous rate from Anthem Blue Cross because of a pre-existing medical condition.
I went back to thinking that maybe just save the hassle and go with COBRA for now since it’s easy. The price is much higher of course but it’s a trade off. Here’s something I needed to know first however, when it comes dealing with COBRA. I was worried that since I didn’t have insurance since I quite my job, if something happened and I had to pay hospital bills I wouldn’t be covered. The good news is that’s not the case assuming your COBRA election period hasn’t expired.
Read this bit of info I found from another site:
Your COBRA coverage will be retroactive to the date that you lost your benefits (as long as you pay the premium). During the election period, you might initially decide not to take COBRA, which means you waive your right to coverage. However, as long as the election period hasn’t expired, you can change your mind and revoke your waiver.
Even if you enroll in COBRA on the last day you are eligible, your coverage is retroactive to the date you lost your job, provided you pay all the retroactive premiums. If you waive your right to COBRA but then incur medical bills during the election period, you can change your mind and elect COBRA, and your plan will cover those bills. Conversely, if you elect COBRA, you can cancel it at any time. You don’t have to use it for your full eligibility period.
Essentially I have to pay the two months since I’ve left my job ($1,600) even though I haven’t needed my insurance. That part sucks. The good part is I won’t have any lapse in coverage which apparently is important especially when you’ve got a pre-existing medical condition. I really wish all this insurance BS was clean-cut and a simple form or something.
Not only is this entire system poorly run and going to bankrupt soon, it’s a real pain for people of all ages to get the proper benefits without jumping through all sorts of hoops.