Finding California Health Insurance Without COBRA

In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act or COBRA for short. It gave employees a chance to continue health insurance coverage after their employer stopped paying for it. For up to 18 months, employees could pick up the premiums out of their pocket and prevent a lapse in coverage while they looked for work. Federal subsidies took over about 65 percent of the cost, but the premiums were still on the high end.

All that changed when Congress deemed it too expensive to extend the COBRA subsidy, which was estimated to cost about $7.8 billion. Without the federal subsidy, premiums soared beyond the reach of many. For example, COBRA could cut an annual $13,500 cost of family coverage down to $4,725. And, remember that people getting coverage via COBRA may be surviving on nothing but unemployment benefits. That federal subsidy was picking up 65 percent of the cost. Those who can't afford COBRA without the federal subsidy now have four alternatives.

Even if group coverage through your spouse's job is a possibility, getting an individual health plan may be less expensive. Group coverage for an employee's family can be very pricey, and individual plans with high deductibles have some of the lowest premiums in the industry.

Before health care reform, high-deductible plans were blamed for discouraging policyholders from getting necessary preventive services. That delay in detecting and treating medical conditions led to more serious problems. This year, California health insurance plans do pay for preventive health care and policyholders are not responsible for co-payments, co-insurance or meeting the deductible before the coverage begins.

Short-term health insurance is another option in certain circumstances. If permanent coverage is guaranteed in the near future, these inexpensive plans can prevent a lapse in coverage. Avoiding that lapse is critical because should you get hurt or develop a health problem when you're between policies, insurers in the individual market are still allowed to refuse to cover adults with pre-existing conditions until 2014.

If you are denied coverage because of a pre-existing health problem for six months, you may apply for PCIP. That's short for Pre-existing Condition Insurance Program. In California, health insurance via PCIP covers a wide range of benefits, including prescriptions. You may be surprised to learn that PCIP does not charge higher premiums based on medical conditions, or base eligibility on the amount of personal income.

PCIP comes in three plan options with different premiums and deductibles. There's even a Health Savings Account (HSA) option that allows you to deposit money and earn tax-free interest. You can withdraw HSA funds to pay for most health care and it still won't be taxed. If you don't need HSA funds for health care, your account can function as a retirement account. At age 65, you can spend HSA money for any purpose, but you will be taxed for purchases other than health care.

In California, health insurance plans will change again when the 2014 state exchange brings more options online. California was the first state to begin preparation to provide options for individuals and small businesses. It's expected to be the largest state exchange because up to 8.3 million residents will likely be eligible to shop there.

The California health insurance exchange will have five types of coverage spanning a range from low-cost catastrophic coverage to more expensive benefit-intense plans. Californians will also be able to connect with federal subsidies for health coverage and government programs, like Medi-Cal, through the California health insurance exchange.


------

By Wiley Long - President, eCAHealthinsurance.com - California's leading online health insurance agency specializing in individual and family California Health Insurance.  Offering personal advisors to help you with your California Health Insurance needs.  Get an online California Health Insurance quote and Save!