There are announcements almost every day of layoffs across the country. With roughly 10 percent unemployment across the United States people are concerned about their health insurance coverage. One of the things that we’ve been hearing is that people simply do not know whether to utilize COBRA coverage or purchase their own separate policies.
The reality is that there is not a 100 percent right or wrong answer here. Your ultimate decision will hinge on your current health conditions and needs. There are many factors to consider. A couple of those factors are price and pre-existing conditions.
In general, the price of a COBRA policy is usually higher than a policy purchased independent of a group. The reason for this is that COBRA coverage is still associated with your former employer and the group must absorb all of the risks associated with each person attached to the group. In turn, the insurance carriers charge a higher base rate to cover these risks. Many consumers are finding individual policies are much more cost effective however there are many others that run into problems due to pre-existing conditions. Groups must cover certain basic risks by law, but individual policies are not subject to the same rules. If you are overweight, have high blood pressure or any number of other possible health related issues, insurance carriers can either deny you coverage or rate up the premiums.
At the end of the day, you need to weigh all of your choices carefully before you make a decision. Don’t get caught off guard with a bad decision. It could mean the difference between getting health care and not being able to afford to go to the doctor.