Are You Eligible for COBRA

If you lost your job recently, you are probably eligible for a COBRA health insurance plan. Your COBRA health coverage is exactly the same health insurance plan you had while insured, except you'll be paying the entire premium for now on.

Do you Qualify for the COBRA Subsidy?

If you became unemployed due to a lay-off and make less than $150,000 per year as a single, you are eligible for a federal subsidy of 2/3 the cost of your COBRA health insurance plan. The term for the subsidy was originally set at 12 months, but has been extended another 6 months recently. So if you qualify for the subsidized COBRA plan you're going to want to take advantage of it.

The 60 Day Window

Assuming you don't qualify for subsidized COBRA coverage didn't get laid off, don't be hasty. You have a 60 day window to enroll in COBRA. Use that time to shop for an individual health insurance plan. Individual health insurance is what people who are self-employed buy for themselves and their family. For the time being, you are self-employed. What you'll find is that individual health plans can save you money. Of course, a plan that will save you a lot of money will cover less, be less comprehensive, than your group health plan was, but hey you're unemployed so it's more important to save money right now.

Short Term Unemployment

If you believe you're employment will be a short one, that you'll be employed again within 6 months and be eligible for a group plan, you should still buy individual health insurance rather than short-term health insurance. This is because short-term health plans have very limited coverage and do not cover any preexisting conditions from the past 5 years. Only consider short-term insurance in the event that you do not medically qualify for an individual insurance plan.

Cheap Health insurance

Buying a high deductible health insurance plan, is a great value for someone who is unemployed. For instance, a high deductible plan with a $7500 deductible can cost an individual less than $100 monthly. The plan can be terminated at any month and, even though it will not provide a lot of coverage for routine health services, the insured gets the benefit of the insurance company's deep discounts at the doctors' offices, hospitals, laboratories, and other medical providers. For instance, a typical hospital stay might cost $4000-$5000 for someone who is not insured. But if you have a high deductible plan and stay at the hospital for one day the cost of that stay is typically marked down by 50-60%. So for the unemployed, either way, purchase the COBRA or get an individual health plan, whichever turns out to be the better value.