Topher Reynoso
January 19, 2024
The first thing to understand about COBRA is that it's not a new insurance plan. It's a continuation of the same coverage you had while you were employed. That’s why this isn’t just an easy “yes” or “no” answer. A lot of people get confused and think that COBRA is some kind of government program or a type of insurance. In actuality, it’s just a law that tells employers they must offer their former employees the opportunity to stay on the company’s health insurance. So if you liked your employer's insurance, COBRA maintains that consistency. If, however, you had concerns or gripes about your previous employer’s insurance, those issues are going to carry over to your COBRA coverage.
One significant aspect to weigh is the cost. COBRA premiums can be substantially higher than what you paid while employed. Even though it is ultimately the same insurance, your employer was previously paying a portion of it (usually the minimum is 50% for an employee’s coverage but generous companies may pay all the way up to 100%). That’s why it feels really expensive when you’re left paying for it entirely on your own. You’re suddenly paying a huge portion that was previously covered by your employer. Assessing whether the coverage is "good" for you requires considering the balance between the benefits and the impact on your budget.
Consider what you valued in your employer-sponsored health insurance. Did it provide comprehensive coverage for your needs? Were you satisfied with the network of healthcare providers and the access you had to hospitals and other facilities? Understanding your preferences and priorities can help determine whether COBRA coverage aligns with your healthcare expectations.
Determining whether COBRA coverage is good for you or not is inherently personal. If you had a positive experience with your employer's insurance, COBRA maintains that level of coverage so you can have continuity if that’s what you’re looking for. However, if you had reservations or if your preferences have changed, it's an opportunity to reassess your needs and explore other options and indeed there are other options. You can look at the marketplace for potential premium tax credits which could provide significant savings. Depending on your income (which may have just been severely impacted if you lost your job) you may qualify for programs like Medicaid in your state. Those programs are often extremely low or even no cost to you for coverage.
Evaluating health insurance options can be complex, especially when adding the nuances of COBRA coverage to the equation. Seeking professional guidance is key to making an informed decision. Kept can assist you in comparing your COBRA option to other available plans, helping you navigate the intricacies and make choices that align with your health and financial goals.
Remember, your health insurance decisions are as unique as you are, and finding the right fit requires a thoughtful examination of your needs and available options. So ultimately whether COBRA coverage is any good depends entirely on you, your preferences, your budget, and the other options that are available to you for coverage.