If you’ve ever used COBRA, then you might probably know its major downside – the price. Although, employer-contribution of the health insurance premium is paid directly by the employer but it is more or less coming out of your own pocket. This is often described by economists as the wages that you’re not getting. And, god-forbid, if you lose your job and wish to stay on COBRA coverage, then you will be sole responsible for paying that entire premium – your share plus the employer’s share.
According to Employer Health Benefit Survey of 2014 Kaiser Family Foundation, for an individual’s coverage, the average annual COBRA premium is approximately $6,145 which is $512 per month. The same is increased to $17,170 annually if it is a family coverage, subsidies excluded.
On the other hand, this amount is reduced by 50% if the plan is private or self-purchased; where the average annual premium for individual coverage is $3,432 and $8,724 for family coverage, subsidies excluded.
This indicates why many unemployed individuals, who are eligible for COBRA, can’t afford it and are moving away to search for new plan options.
But keeping your old COBRA plan is not entirely unproductive. Suppose, you selected a new Obamacare heath plan from the health insurance exchange in your state; you’ll be required to give up your old plan and choose from a variety of new plans. In that case, you need to learn about it to completely understand it and you will keep comparing it with your old COBRA plan.
Whereas, continuing with the current COBRA plan will provide an ease for you to keep in-network with your existing healthcare professionals, eliminate the need of checking whether the new medications are covered under the plan’s drug formulary, etc.
Why Choose A New Plan Rather Than Keeping COBRA?
- COBRA is no longer the only option in health care market.
- ACA enables unemployed individuals to purchase health insurance outside the open enrollment period (within 60 days).
- You could qualify for health insurance subsidies provided by your state’s government.
- Once you sign up for a COBRA plan, you have to keep it until the plan expires or the Open Enrollment period begins. You cannot change your plan in any situation other than the mentioned.
Clearly, COBRA is not the same as it used to be before for unemployed individuals and is definitely not the only option left for getting health coverage. Having a COBRA plan can keep you lock into an out-of-budget plan for many months. Health plans through state exchange or a private insurer are taking hype with Obamacare leading them all. Thus, before selecting a health plan for you and your family it is better to research all available options so that you don’t get stuck up with something that doesn’t suit your requirements.