What are the best COBRA insurance alternatives?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) was created to help those losing their jobs to maintain their employer’s health insurance benefits. COBRA benefits the recently unemployed by softening the  blow that job loss can have. However, the major con of the health insurance offered through COBRA is that is very costly. The monthly premiums can be close to a thousand dollars in some cases, which can cause major problems for people who are losing their main source of income. COBRA is intended to only offer temporary medical insurance

There are a few options besides COBRA health insurance: short-term medical coverage, long-term coverage via the special enrollment period, or switching to a spouse’s coverage. These options are more affordable than COBRA, but often offers coverage that is inferior to the coverage offered through COBRA. Short-term insurance offers a quick and less expensive alternative to those that have just loss their major source of income from their job. These plans usually have much lower premiums than COBRA. However, the coverage that these plans offer is usually limited and have high deductibles relative to the rest of the insurance marketplace, including COBRA. Short-term health insurance is best for those that believe their unemployment will be temporary and believe the cost of COBRA will be too great.

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Long-term health insurance offered through the special enrollment period offers benefits for those that believe that their unemployment will not be temporary or will not get health insurance under their new job. (also referred to as special enrollment insurance) Losing your health insurance OR qualifying for COBRA does qualify you for a special enrollment period to buy on or off the marketplace. These plans usually cost less than COBRA plans but can present a problem for those that are offered different health insurance from a new job. This coverage is the best plan for those looking for health insurance benefits that believe their unemployment will not be temporary.  

Those that are married also may have the option to enroll in their spouses plans but present the same major issues that short-term and special enrollment insurance. It usually costs less than signing up for your own health insurance but can be a problem when the medical benefits offered through the plan are not as great as the original plan. This coverage can be either temporary or long-term, depending on the scope of the medical insurance plan.

These three coverages are usually the three main options for health insurance during unemployment besides COBRA. All offer benefits for those that lose their health insurance after losing their jobs, one of the major issues that surface during unemployment.