Short for Consolidated Omnibus Budget Reconciliation Act, COBRA is a federal law that allows individuals and families to continue their group health insurance after losing a job. This is a good option if you need short-term coverage or prefer to stay in your current network of trusted doctors, but the price tag is high: Estimated plan costs, which vary depending on where you live, can top $2,000 a month for family coverage.
Why is it so much more than when you had a job? When you get health insurance through your employer, they pay the bulk of the premium, says Christen Linke Young, a visiting fellow with Brookings Institution’s Center on Health Policy in Washington, DC.
“What you pay as an employee is maybe 25 percent of the total cost,” she says. “But you have to pay 100 percent of the premium when you use COBRA. For most people, that won’t be the most affordable option.”
COBRA is available for all group health plans for employees who worked somewhere that had 20 or more employees. If you choose this option, you have at least 60 days from the date you lose coverage to sign up to continue with your former employer’s plan. That coverage lasts for 18 months.
“If someone is in the middle of a very expensive healthcare service, leaving job-based health insurance while in treatment for cancer or another health problem that’s very costly, they may value continuity with their health insurance,” says Young.
Young added that with the changes Congress is considering making to Medicaid and overall insurance plans, the situation could become much worse for people who lose job-based insurance. But they should still have options.
“Most people who lose their job and lose job-based health insurance do have an opportunity to find coverage that will be comprehensive and cover the medical needs of them and our families, notwithstanding potential changes that could be coming,” she says.
Read the full article here
