COBRA Cost: Expensive, But Life-Saving

2008-04-28 12:09:04

( Health )



COBRA has nothing to do with snakes. It is an acronym for the federal law, Consolidated Omnibus Budget Reconciliation Act of 1985 which mandatorily covers employers having at least twenty employees. COBRA is a group health plan which is sponsored by your employer or association. COBRA health insurance program allows a former employee who loses health coverage, because of a job loss, divorce or any other allowed circumstances under the law, to be covered under the same plan for a maximum of eighteen months.

If you participate in this program, you are actually buying a continuation of your health coverage that you once had with your employer. The major drawback for participating in this type of health program is that COBRA cost is very expensive. For the sole reason of high COBRA cost, many employees are turned off from participating in the program. But with the same health coverage, you will actually enjoy the services of the same medical and dental professionals while you were still at work.

Despite the expensive COBRA cost, a COBRA health plan in place can actually be life-saving as health care cost continues to rise. Others who have not taken advantage of this federal program and eventually developed a serious illness after they lost their jobs were forced to file for bankruptcy.

While it is cheaper to purchase a private health insurance, you will not be allowed to continue enjoying coverage on your pre-existing medical conditions that were originally covered under your old health plan while you were still working. Private health insurers often deny coverage of pre-existing conditions. The reason for this is that in COBRA health coverage, all employees share the health risks, while in an individual health plan you do not share the risk with anybody in the group. You bear all the risks.


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