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Why Does COBRA Cost So Much?

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COBRA insurance is shockingly high. Why? Basically, COBRA was designed to be only temporary health insurance to those individuals who have recently lost a job or have gone through a divorce and find themselves uncovered by employers or employer benefits. Not only is the individual required to pay the full medical insurance premium, but he or she must also cough up another 2% on top of that for administration costs.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. When it was passed in 1986, the plan covered those who have lost group coverage with employers, or even those who have been fired or ‘let go’ because of pending illness or surgeries that might raise premiums for the employer. COBRA protects individuals from such underhanded practices, but the downside to the protection is its outrageous cost. For example, COBRA coverage may cost anywhere between 100% and 150% of the costs you pay for group insurance coverage paid through an employer. Individuals or families who were paying $300 a month for health coverage may suddenly find themselves facing payments of over $1,000 a month with COBRA.

COBRA offers benefits to those from California group health plans of any size, qualified beneficiaries such as spouses and dependent children and predetermined qualifying events that include but are not limited to reduced work hours or voluntary or involuntary termination. COBRA covers divorced individual for a maximum of 36 months, though the individual must inform COBRA of the situation within 60 days following a legal separation or divorce.

COBRA coverage typically lasts for about 18 months. COBRA coverage is considered as ‘previous health coverage’ as long as you have not had a lapse in insurance for more than about 63 days. However, if you do get sick or have an accident during that 18-month period with COBRA, you may very well find yourself having a difficult time procuring insurance after it expires.

That’s why California health insurance agents suggest that individuals first look into individual or private health insurance policies.

COBRA health insurance is so expensive that most people can’t afford it. This situation is not to be blamed on California health insurance companies, however, but on the rising costs of medical care in the U.S. As a matter of fact, when was the last time you asked your employer how much he or she was paying out to health care plans for employees?

Discuss ‘what-if’ options with a California health insurance agent to learn and understand your options in a worst-case scenario. In most cases, individuals will opt for private health insurance rather than deal with the high premiums associated with COBRA.

While COBRA does help cover gaps in insurance, and they mean well, the costs are extremely prohibitive and restrictive. In its wake, thousands of individuals and their families are left without adequate health care coverage, which in turn strains the health care system even more. No one should have to choose between health care and their wallet, and yet COBRA forces many individuals to do exactly that. Don’t leave yourself unprotected. Contact a California health insurance agent and learn about your options.

Matt's California Health Insurance Services is here to help you save money

Matt’s California Health Insurance Services is here to help if you’re dealing with COBRA. We first would suggest you get a California health insurance quote from our instant quoting tool and compare health plans from several top rated health insurance companies her in California. Our quotes show you all the plans from all the carriers’ side-by-side in one easy quote. You’ll see price, benefit details, deductible… everything you need to make an informed decision. Once you have found a plan that fits your needs and is within your budget you can apply for health insurance online with our secure carrier direct online application links. If you prefer to fill out an application by hand you can do so. We have the most up to date health insurance applications available for you to print out. If you have any questions, by all means, pick up the phone and call. We are happy to answer any questions you may have.


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