Losing your job and health insurance

What could be worse? Not only is it the holidays, but you just got laid off – and along comes a letter informing you that your COBRA will only be $1,400 a month…

OK, maybe $1,400 is high for you, but it certainly isn’t high for many of the folks who have this little problem. So, what are your options? No, running away to Canada will not solve the problem – besides, your family is here and it’s the holidays, remember?

Seriously, let’s take a look at what options you have. First of all, not having insurance is not a good option and here’s why: If you or any family member has an accident (and that’s what’s most likely), you could easily see a bill for $75,000.

That’s what a client recently told me it cost her for her daughter’s broken leg. And if you have assets – any assets, the doctors and the hospital will get paid one way or another. So, at the very least, get some accident insurance. It’s cheap and if you are healthy, accidents are your biggest concern. This may not be the best solution however…

What if you have some pre-existing conditions? If you or any family member has pre-existing conditions, treat this decision regarding health insurance very, very carefully and here’s why: With certain pre-existing conditions, a person may be ineligible for standard health insurance. Now, don’t panic; there are options here. First of all, examine the health of your family. Are you the person who lost the job with the benefits? And are you the person with the serious pre-existing conditions? If so, get two policies. One for you (COBRA), and one for the rest of your family.

For you, be careful. Understand what your rights are under the HIPAA regulations (I know, what’s HIPAA?). I’m not going to take the time to explain it here – it’s complicated. Go to http://www.hmohelp.ca.gov/dmhc_consumer/hp/hp_hipaacp.aspx for information.

Here’s the bad news: You must first use up all your Federal COBRA/ Cal-COBRA if you qualify for it. Costly? Perhaps. Be careful. The risk is that you (or a family member) may lose the ability to obtain health insurance in the future. So, as I said, be careful here. If it’s a family member with the pre-existing condition, the problem gets more complicated. Get some expert advice.

For members of the family that are healthy, you have all kinds of options. Find the most cost effective plan that you can afford for them. It may be the COBRA offering - don't discard it without comparing it to other plans. Understand, however, you must get coverage in place in less than 62 days after your work-sponsored health insurance ends. Otherwise, you lose the benefit of continuous coverage and that means that if it is determined that there is a pre-existing condition, it is not going to be covered for as long as 12 months! That could be a big deal.

Yup, time's a'wastin' and it’s the little things that will get you into hot water in these circumstances. Give me a call. If I can help in any way, I will.