A Possible Solution to High COBRA Premiums
COBRA costs in the 2006 survey averaged $9,914 per year, 19% higher than two years ago. That’s on average $826 per month. If you elect COBRA coverage, you must make the initial premium payment within 45 days of your COBRA enrollment. If you don’t make the initial premium payment within those 45 days, your coverage will typically be terminated.
Now, as a rule people enroll for COBRA benefits for one of several reasons and they could be, lay off, retirement, change in job status such as reduction in hours, death of a spouse or divorce to name a few. As I’m sure you’ve noticed none of the reasons I mentioned for getting on COBRA are positive life changes, in fact the only positive reason I can find for COBRA would be retirement (if it is voluntary).
In the summer of 2002 my family fell into this issue directly as I was laid off from my manufacturing job here in southeast Michigan. My monthly COBRA payment was $786.00 per month. For any average working class family this financial burden would be devastating and our family was no exception. Our issue matched those of many other families and was simply this; our income had been reduced to my unemployment check. That unemployment income amounted to $1448.00 per month, minus $786.00 for COBRA left us a grand total of $662.00 per month to cover all our other expenses, seriously? And even that amount was before taxes!
The question I needed to answer was this: Do I pay the $786 per month and deplete our savings account substantially faster or simply go without heath insurance until I found new employment. My plan was to go without, until finding new employment. Then a few days later my wife informed me she was pregnant, thus more or less forcing us to pay the high premium and mind you this price was for an HMO plan!
A few years after our dilemma had come to pass my best friend found him self in the same situation we were in. Out of work with no benefits and financially strapped. Now for my friend COBRA was not even an option as he had recently remarried and had six children living with him. Fortunately for him I had found an alternative.
The alternative is Consumer Driven Health care. There are several companies that offer this product, I directed him to one named Ameriplan USA. I selected Ameriplan for several reasons, 1. They are the innovator of this line of Health care. 2. They are the industry leader. 3. Most importantly to me they have strong ties to the Consumer Health Alliance, the governing body that regulates their industry.
When he looked into it and found the program would save him over $600 per month in premiums along with nearly $700 on immediate Dental needs his family had they enrolled immediately.
I sincerely wish I had this information myself in 2002 when my family was faced with its health care crisis. This alternative would have saved us several thousand dollars along with giving us the security desired in a great health care plan. That is the reason I chose to write this article now. For all of you who may feel trapped in the same place my family was a few years ago, I want to let you know there is an alternative. For those of you that are content with your COBRA, and can afford the premiums great. For those of you who can’t, there is another way.