COBRA vs Regular Health Plan in South Carolina

Since unemployment is at an all time high in South Carolina and across the nation, it is natural to consider how people afford health care when they don't have a job. Of the 45.7 million uninsured Americans, most of them are simply in between jobs. Obviously, no one plans for an illness or accident to occur. Not having sufficient health coverage, even if it is only for a few days or weeks, could turn into a financial disaster for your family. Deciding to have health coverage even when you don’t have a job is the smartest move you can make to protect your family.

The Consolidated Omnibus Budget and Reconciliation Act of 1985 (COBRA) is a federal legislation that allows you to continue coverage with your South Carolina group health plan even after loosing your job. If your unemployment is due to voluntary or involuntary termination for any reason (besides gross misconduct) you'll probably be asked to consider COBRA as a health care option. However, the cost to continue that level of coverage is not cheap. You will pay the entire premium (even if your employer paid a portion during your employment) plus an administrative fee of 2%. This cost is in addition to any deductibles or co-pays that you would also pay. In February 2009 a provision was included via the “Stimulus Bill” that would cover 65% of this monthly premium if you qualified. It is a big discount and certainly worth looking into. If you made less than $125,000 a year and were terminated between 9/1/08 and 12/31/2009, you just might qualify.

Even if you do qualify, the monthly out of pocket expense of COBRA coverage is still a deal breaker for some people. In these tough financial times, you can’t afford not to have proper health care in the event of a accident.

Now, if you are a young, healthy, single individual, you may find that the coverage COBRA extends after you are unemployed is a little more than you need. Not everyone in South Carolina will want to have an all-inclusive health care package, when simply covering hospitalization may be all you want or need. Once you decide what you can do without, consider shopping around for a regular health plan. It's best to shop nationally and locally, and always read and re-read what your plan covers. Most insurers won’t cover those who are very unhealthy or have pre-existing conditions, so it’s always best to check around and ask a lot of questions.

Short-term health care plans are popular when you are in between jobs. They are even a good idea if you are waiting the probationary 90 days once you start a new job. Regular health plans allow customization, so you aren’t paying for things that you don’t need or want.

The bottom line is, you know what you and your family needs most. Keeping everyone safe and healthy is the most important thing. When you are unemployed, you will face many challenges while searching for stable work. Keeping in place a reliable health plan should not be one of those challenges. Make smart decisions now to avoid disaster later. Whether you choose COBRA or a regular health plan, the actual coverage is what you will be thankful for in an emergency. Health care is not the place to take chances or play the odds.