The premium costs for someone contemplating purchasing health insurance under the provisions of COBRA can be prohibitive. Perhaps that is why only 20% of eligible people choose to enter the program. Many of these people are living on unemployment compensation, which makes the idea of paying high health-insurance premiums seem completely out of reach. The people that do not opt in to the COBRA program choose to purchase private insurance plans, or choose to have no insurance plan at all.
The law does not give people much time to make a decision about whether or not they want to use their benefits under COBRA. They only have 60 days after employment separation before eligibility ends. Choosing to purchase private health insurance is a good option for most of these people.
Here are some of the advantages of using COBRA alternatives:
· Premiums are usually less expensive for private health insurance than for premiums under a COBRA sponsored plan. Saving money is important, especially for people who are surviving on unemployment compensation.
· People can choose from a variety of different health care plans. Health insurance agents often have a variety of plans available to people who need insurance. The options and prices vary from company to company. Shoppers decrease premiums by choosing plans with high deductibles and preferred providers.
· Health insurance agents act as liaisons and advocates between the health insurance companies and their clients. They can advise clients on coverage options that are suitable for their needs. Having someone to explain the ins and outs of complicated health insurance process is perhaps the best part of having a health-insurance agent.
Disadvantages of using COBRA alternatives:
· Policies may not have coverage that is as extensive as an employer sponsored health care plan. Conditions like prenatal care and pregnancy are sometimes excluded from private health insurance plans. Employer-sponsored plans usually cover these conditions.
· Private health insurance plans often have exclusions for pre-existing conditions. An employee who continues under their form employer sponsored plan usually does not have a problem with pre-existing conditions being excluded.
· Higher deductibles are common with private health insurance plans. This means the covered person will have to spend more out of his own pocket for certain conditions and treatments.
The disadvantages are relatively few for plans offered through the private sector. In fact, the advantages far outweigh the disadvantages for most people. Those who want to shop for a health-insurance policy need to act quickly to find an agent or company that suits their health insurance needs.