Lesson Learned: Never COBRA Your Insurance

posted by on ERE Exchange by Glenn Fox on June 1, 2009

Learn from me.....never pay to COBRA your employee health insurance.

For the past several months I've been paying nearly $1,500 per month
in COBRA payments to continue my AOL health insurance. With my COBRA
now running out it was time to shop for a new family health insurance
plan. Since the AOL health benefit plan was pretty good my wife thought
the easiest thing to do was contact our current provider, United
Healthcare, and find out the cost of an individual family plan. Boy,
did we learn alot from making that call.

As it turns out my family can get nearly the same health coverage
(including prescriptions) program as AOL - - for less than $600 a month
- total. Unbelievable!! This was nearly a $1,000 per month savings for
us. The person who helped us said that it is almost always cheaper to
simply obtain an individualized plan as opposed to paying the COBRA
premium. Go figure!

Just wanted to pass this along!

(read more of my ramblings here)

11 comments

• 
  
  
   Leasa McIntosh
  
  1
  point
  
  17 minutes ago
  

  I'm
  not sure about all states, but in Colorado, you can create a "group" of
  one - then the "group" can accept pre-exisiting conditions.  (there are
  a couple of rules to go with it), but still a cheaper route to go for
  those with pre-existing conditions.  Talk to a local insurance broker.

  
  
  
  
  • 
    
  
  
  
  


•   Robert Stein
  
  1
  point
  
  1 hour ago
  

  Cobra
  is the ONLY option for many who have a pre-existing condition. In
  addition, individual plans may be good only until you get a serious
  illness, at which time they can opt you out (either at end of contract
  period or even after one month if you are on a monthly plan).  High
  risk. Need a public option that accepts everyone - where profit is not
  a motive.

  
  


•   Andrew Gadomski
  
  1
  point
  
  2 hours ago
  

  Pre-existing
  for you or your family will also help you decide if you should go group
  or individual. A little known fact is that its harder for an insurance
  provider to "drop" you if you are in a group. Its "easier" as an
  individual.

  
  

  Yes - there are horror stories about people being dropped on
  non-cobra individual plans AFTER being admitted to the hospital. Those
  poor people have to take loans to get the help they need. This is a
  very small percentage of the people on individual plans. But at that
  point, its a little late. Shop and buy for your needs :)

  
  


•   Michael ("Mike") Rabin
  
  1
  point
  
  18 hours ago
  

  Good
  advice regarding "individual policies" vs COBRA...AS LONG AS you are
  young and healthy and have no PRE-EXISTING CONDITIONS.  If you don't
  meet those criteria, forget about individual, private health
  insurance...you will be denied coverage, or charged a premium that will
  make COBRA look like a bargain.

  
  


•   Alan Fluhrer
  
  1
  point
  
  21 hours ago
  

  Also
  look into the difference of a group policy vs an individual policy. If
  you are on a company group policy and go to cobra. The cobra will still
  be a group policy.  IF you go off cobra it might move you to an
  individual or family policy. there could be other items, or
  preexistings, that could drop off and affect you down the road. I would
  suggest doing your research.

  
  


•   Mitch Heinemann
  
  1
  point
  
  22 hours ago
  

  As
  Jason said if you have a pre-existing condition that the Insurance Cos
  doesn't like COBRA is the way to go given the Fed Gov's subsidizing it
  for the short-term.  65% off made it much more attractive for me. 

  
  


•   Sarah White
  
  1
  point
  
  1 day ago
  

  Also,
  if you are just in between jobs - the best option is to do a short term
  policy - they typically have a higher deductable and last for 60 days
  -6 months - but at a cost of only $150/mo...  insure.com

  
  


• 
  
  
   Jason Yillik
  
  1
  point
  
  1 day ago
  

  You're
  right, it's cheaper unless you have a preexisting.  Then the family
  member with the condition is usually required to have a seperate
  policy.  But the COBRA ARRA this year cuts 65% off most premiums.  So
  35% of $1,500 is cheaper than your new $600 policy - if you qualify
  with the ARRA termination dates.

  
  

  http://www.dol.gov/ebsa/cobra.html

  
  


• 
  
  
   Glenn Fox
  
  1
  point
  
  1 day ago
  

  Hey
  Krista -we simply called United Healthcare.  They referred us to one of
  their divisions that write policies.  We filled out some forms,
  answered a few questions and now the policy kicks into effect at the
  end of this month when my Cobra runs out.  Given the cost savings - I
  wish I would have done this months ago!

  
  


•   Krista Bradford
  
  1
  point
  
  1 day ago
  

  Glenn, my friend, where did you get your private insurance? I'm paying more than twice what you are for  Blue Cross CT.

  
  


•   Matthew Franzen
  
  1
  point
  
  1 day ago
  

  This
  is very true and was a surprise for me as well. The cost of individual
  insurance was almost a third of what COBRA was charging to extend my
  previous employers coverage. Good of you to post this up as more people
  are looking at starting up their own businesses/going independent.