Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a law that allows Americans to keep the insurance plans that are offered by their employers after they have quit their jobs. Usually, COBRA insurance also covers for the spouses or children of policyholders. Many people are not sure whether they should cancel the insurance plans from their previous employers or obtain COBRA insurance after they have quit their jobs. Here are the pros and cons of getting COBRA insurance.
One of the advantages of COBRA insurance is that it provides coverage for pre-existing medical conditions. Those who need to see a doctor on a regular basis may find that it is difficult to get an individual health insurance policy. Some insurance providers refuse to take the risk to provide coverage for such conditions, while others have complicated evaluation procedures that may delay approval for an indefinite period. People who are applying for COBRA insurance can be assured that they will receive coverage for pre-existing medical conditions, because it is a law that insurance providers must insure people with such conditions if they get insurance through their jobs. Since COBRA insurance is an extension of the insurance coverage that is provided by an employer, the same law applies.
COBRA insurance may also serve as travel medical insurance when a policyholder makes a trip to a foreign country. If the insurance plan that is provided by a former employer provides overseas medical coverage, then the COBRA insurance policy will also offer financial protection for certain losses that may occur during travel. This means that a COBRA insurance policy-holder may not have to purchase a separate travel insurance policy when they go on overseas trips.
Some people do not think that COBRA insurance is the best option, because it is only temporary. In addition, when government subsidy expires after nine months, the premiums will become very high. Those who are insured through COBRA do not get the best value for their money, and they cannot get coverage that is specifically customized to meet their individual budget and health needs.
Overall, COBRA insurance is only beneficial if you, your spouse, or your children are suffering from a pre-existing medical condition or you need a temporary policy while you are looking for new a job. If you want to get a low premium policy on a permanent basis or a customizable policy, it is advisable that you purchase an individual health insurance policy.