LOWER COST ALTERNATIVES TO COBRA COVERAGE

[[OnlineAdviser]]

LOWER COST ALTERNATIVES TO COBRA COVERAGE
Q: I am currently on COBRA after being laid off from my job several months
ago and it is extremely expensive. I also keep getting turned down for
individual coverage because I take one certain type of medication. I need an
affordable individual plan until I can get employed again with a firm that
has a group plan. I also need an alternative to state coverage if I ever
want to freelance or be self-employed. I can't seem to win with any
insurers I contact here who just tell me to stay with COBRA, which will
eventually expire. Any suggestions?

A: Your dilemma is the most common situation facing individuals who purchase
their own health insurance. The question is do I purchase full coverage
insurance that is costs about the same as my mortgage or rent, or do I
purchase a less expensive coverage that leaves me with significant
out-of-pocket expenses and an uncovered risk?
From a financial and mathematical perspective, the second option is almost
always the better approach, yet almost no one in the insurance or benefits
field would be comfortable recommending this approach. This explains lack of
guidance with your problem. On a nationwide scale, COBRA coverage is the
best approach for less than 3% of those leaving a job, so the odds are
strong that a better approach is available. A low cost health insurance that
provides coverage for everything except your pre-existing medical condition
is probably the best approach. In your case, the situation is now more
complicated because you have been declined for other health insurance. The
previous declines keep you from qualifying for some lower cost health plans
that would have issued coverage by excluding the pre-existing medical
condition. A professional adviser would have been able to avoid those
declines, but it is too late for that now.
You need to focus on a health insurance that allows applicants that have
been previously declined. A short-term medical insurance plan is most
appropriate if you expect to be covered by a group health plan in the
future. Check the complete listings at www.MedSave.com. One possibility is
the Celtic plan that does not ask about previous declines. The TIG Select
only restricts applicants who have been declined in the past 12 months. Also
consider the Basic Health Insurance plan that accepts all applicants under
age 70 but only provided limited coverage. Check to see whether any of these
plans are available in your state.
Also, it appears important in this case to recognize that your total medical
expenses are your largest (or at least one of your largest) financial
concerns and then build your financial plans around that priority rather
than trying to squeeze health care costs in as a "last minute" budgetary
item.
In the big picture, you will find that this issue is manageable if you
integrate your health plan financing with your overall financial planning
strategies and utilize solid professional advice to avoid the pitfalls.
See the article "Short Term Medical Insurance for Special Situations" at
http://medsave.com/articles/Short-term-medical-insurance-for-special-situations.htm
for more information on this topic.