A very attractive and significantly lower cost alternative to Cobra continuation coverage is an individual health insurance policy which can be purchased for one person or for an entire family on the open market. The reason that these types of policies are inherently cheaper is because you can design the plan to meet your personal budget.
The problem with Cobra continuation coverage is that you are continuing a health insurance plan that was designed and purchased by someone else. Specifically your former employer. The decisions made during that purchase were much different than the decision that a family must make when purchasing their own health insurance coverage without the help of their former employer (who used to pay a significant portion of the monthly premium as an employee benefit). Cobra continuation plans typically have very low calendar year deductibles (e.g. $250 or $500). The lower the deductible, the higher the premium. When you design your own individual health insurance policy you can raise the calendar year deductible and lower your premium drastically whilst retaining all of the “first dollar” benefits that are normally included with Cobra continuation coverage.
“First dollar” benefits are defined as “benefits you receive WITHOUT paying your calendar year deductible (e.g. outpatient doctor office visits, outpatient generic and brand name prescription drugs, outpatient preventative care or wellness coverage and accidental injuries). All of these “first dollar” benefits are covered WITHOUT paying your calendar year deductible first. Typically only a small “co pay” ($25 or $30) is required at the time of service. This being the case, it is much wiser to choose a high deductible plan (e.g. $2,500 per calendar year) with $5,000,000 major medical coverage per family member instead of paying twice the premium (or more) for Cobra continuation coverage. Doing so will protect each family member just as well as Cobra continuation coverage whilst also maintaining all of the aforementioned “first dollar” benefits found on most Cobra continuation plans.
A common misconception is that individual health insurance plans do not cover “pre-existing conditions”. Whilst this can be the case with some carriers (e.g. Blue Cross Blue Shield.) There are many quality insurance carriers who actually cover controlled conditions such as Hypertension (High Blood Pressure) & Hyperlipidimia (High Cholesterol) from day one, including the medication one uses to control such conditions. This being the case, if you and your family are reasonably healthy people there is no reason to throw your money away by paying an inflated Cobra continuation premium. After all, isn’t it better to pay a bit more IF you actually end up in the hospital, then pay twice the premium (or more) each and every month for fear that one day you will? For quality health insurance options for the insurable please visit: http://www.sbisvcs.com/Small%20Business%20Health%20Insurance.htm
What if you have tried to obtain individual health insurance coverage and have been declined for a pre existing condition more serious that the two aforementioned conditions? Are there still options to Cobra continuation coverage? Indeed there are. The options are threefold. They are as follows:
1.) State Insurance Risk Pool Coverage provided under HIPAA that provides seamless continuation coverage for pre existing conditions such as Diabetes or Cancer after your Cobra continuation coverage expires. Not all states have insurance risk pools but many do. To find out which ones do visit: http://www.naschip.org/states_pools.htm
2.) Small Group Health Insurance which contains the all important “Guaranteed Insurability” clause. This option can be elected with a minimum of two people (often husband and wife) who work for the same company. Must have corporate tax ID number and both “employees” must work 30 hours or more.
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3.) HIPAA qualified “Defined Benefit” Health Insurance policies. These policies (recently advertised on the Fox news channel) are issued on an individual basis to anyone regardless of medical history. Whilst these policies have coverage limitations. They do provide an unlimited surgical benefit and up to $1,000 a day for in patient hospital treatment. These plans will cover pre existing conditions such as Diabetes or Cancer from day one providing you have proof of prior coverage of 18 months or more with no lapse in coverage of more than 63 days. To learn more visit: http://www.sbisvcs.com/guarantee_issue.htm