Dealing with recent unemployment can often be frustrating. With the current economic recession still receding, many can remain unemployed for long periods at a time. But are you prepared? Along with unemployment come the little details which may end up hurting you in the pocket if untaken care of. To prevent financial problems that come along with health insurance lapses, here are five health insurance tips that will help relieve you of unforeseen financial headaches and burdens to your loved ones.
Are You Covered by COBRA?
Recently unemployed Americans can often be covered by a government subsidized insurance called COBRA (Consolidated Omnibus Budget Reconciliation Act of 1986). What this means is that you get to keep the coverage given by your health insurance when last employed for up to 18 months. Those who can’t afford COBRA can also receive a discount of up to 65 percent. Be aware though: COBRA users pay at least an extra 2 percent “administrative fee”, while lapses in payment may result in immediate termination.
Extended Coverage is a Plus
For those with a tight budget in the pockets, find out the age limit on your parents health insurance plan. Those under 26 may qualify for extended coverage under that plan, effectively saving you money for as long as possible. Extended coverage is great for those who are without any health risks including cancer, heart disease, and other long term medical issues. However, some of the smaller insurers may not carry this perk so be advised that it does not apply to all individuals.
Individual Plans May Result in Savings
The price of health insurance depends significantly on how large you require the coverage to be. Those without long term medical conditions may do well in purchasing individual health insurance plans. If eligible, these plans may cost even less than those under COBRA, resulting in the best possible deal from an insurer. The only potential problems to consider are: 1) individuals with pre-existing medical conditions may be declined by insurers until legislated law preventing this move comes into effect in 2014 and 2) if you have family members that require health insurance plans as well.
Temporary Coverage Could Make for a Smooth Transition
If the options above do not appeal to you, temporary health insurance plans can be an effective method to receive the minimally required coverage you need while doing away with the lengthy contract terms. Given that these generally do not cover any pre-existing medical conditions, be cautious when looking into this alternative. Furthermore, temporary health insurance policies tend to be more costly than getting longer binding policies.
Research into Your Options!
Research, research, and research! Seeking out all your options is the most important thing you could possibly do to save yourself from overpaying for health insurance. Be sure to look online into different insurers while visiting firms in person. Major insurance companies are inclined to be less costly, while smaller companies may give a more personalized treatment.
Being unemployed is never an easy task, as one always has financial expenses to be taken care of that cannot be entirely avoided. Nevertheless, some unknowingly increase their financial burdens caused by changes in their insurance policies. Without appropriate coverage, an individual may unnecessarily squander wealth that could be used for better purposes. Hopefully this article will give you some insight into your possible options to save you a hefty penny.
This guest post was written by Francis “Frankie” Anderson, an author and blogger who was an insurance broker in his past life. He currently writes about 2 Health Insurance Plans and other topics over at 2HealthInsurance.net. Thanks for reading!