Choosing Between Subsidized COBRA and Private Health Insurance
The new COBRA stimulus package subsidies provide a 65% percent reduction in your monthly premiums. This reduction is meant to encourage the millions of people losing jobs to maintain their health coverage.
As recently as January, COBRA premiums for a family were $1,062, comprising almost 90% of a person's unemployment check on average. Fortunately, the stimulus package allows for that average to be cut down to a manageable $375. Though $375 may be an affordable and reasonable cost for a family's health coverage, it may still be over $100 above other private health insurance plans on the market4. For this reason, depending on your own personal needs and conditions, you may wish to opt for a private health insurance plan.
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| Benefits of COBRA | Benefits of Private Health Insurance |
|---|---|
| • Provides a stable, short-term source of health coverage regardless of your pre-existing conditions. | • Generally much less expensive than COBRA plans -- as much as $100 less, even after the 65% federal subsidy. |
| • Premium costs for beneficiaries reduced by 2/3 for the first nine months due to stimulus package provisions. | • Can last as long as you wish it to last (COBRA lasts for a maximum of 36 months). |
| • You receive the same quality of care and network offered through your employer's plan. | • Health Savings Accounts are tax-deductible, further saving you money. |
|
• Allows you to choose and customize your personal coverage preference among many plans. |
In general, you can potentially save hundreds to thousands of dollars a year in premiums by choosing a private health insurance plan over COBRA. You can get started by comparing COBRA alternatives.
Start here to request information on COBRA health care alternatives >>
4 Based on a high-deductible health insurance plan from Affinity Health. Standard rates for "Area 5" of California in 2008. < http://www.cap.org/apps/docs/insurance_programs/health_insurance/HSA_CAPGroupHealthRates_CA.pdf >