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Can I Afford COBRA Insurance Premiums

Finding an Insurance Plan that Fits your Budget

Can I Afford COBRA Insurance Premiums?

For many families dealing with job loss and consequently income loss, figuring out whether or not COBRA insurance premiums are something you can afford can be a tricky decision. Many people do not know exactly how much COBRA will cost and also do not know how to compare COBRA to other insurance options on the market. Taking the time to explore multiple plans including the depth of coverage, cost of coverage, and size of the network will help you know what is right for you. Use this guide to help figure out what you can afford and whether or not COBRA is the right decision for you.

What is Your Monthly Insurance Budget?

Before making any health care decisions it is always wise to first calculate your monthly budget and determine how much you can afford to spend on healthcare. According to the latest analysts you should plan to spend between 5-10% of your monthly income on health insurance costs at the most. That means for example if you make $50,000 annually, you should try to spend less than $5000 a year on health insurance. Monthly that means you should look for a premium of less than $416.

It is important to realize that this is an ideal amount but depending on your personal finances and health situation, this number may or may not be realistic for your family. You should always determine a number that works for you.

2. How Much Is Your COBRA Premium?

The next thing to do to determine if you can afford COBRA is to determine the cost of your COBRA premium. This cost will depend on what the monthly cost of your employer-sponsored insurance was. The cost of COBRA is based on 102% of the cost of the plan, including both what you paid and what your employer paid. Learn to calculate your premium for COBRA.

3. How Much Are Other Health Plan Options?

Once you know how much COBRA costs, now you want to find out how much other insurance options will cost. Depending on your health needs, location, age, and lifestyle you may be able to find a similar plan that is up to 65% less expensive. To determine what other options you have, fill out this simple quote form and explore your options. Note the coverage each plan provides and how much each plan costs.

4. Which Option is the Best For You – COBRA or Another Health Plan?

Lastly, now you want to compare the plans you found with your COBRA plans. Make sure to consider these while also considering your health needs. Although your budget is a major consideration, health expenses can quickly add up so make sure you truly choose a plan that will work for you. For example, if you like to go to the doctor frequently, a high deductible plan is not right for you because you will have to pay out of pocket for virtually all of those visits. You likely would be better off with a private plan that costs more monthly but required less out of pocket expenses.

No matter what option you end up using - COBRA or another insurance plan – always make sure to find a plan that fits both your health care needs and budget.

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