Weighing Costs of COBRA

When I got laid off on August 3, I was told my health insurance would continue through the end of that month. I received COBRA paperwork in the mail and signed up right away. The COBRA bill came in soon after and I paid it online: $744.75 to continue my health and dental insurance for the month of September. This amount is roughly 75% of my after-tax unemployment insurance payments. I have a pre-existing condition (like 50% of the U.S. population) which means I have to have insurance coverage. Aside from the obvious reasons for having health insurance (that is, getting medical care and prescription medication), the pre-existing condition means I must not have a break in my insurance coverage, or future insurance policies (even those obtained through an employer) could subject me to the pre-existing condition exclusion. This means the insurance company would accept my premiums, but would not cover anything related to any pre-existing condition that was treated in the six months prior. They are allowed to do this for up to a full year. (citation)

This is the reason I am choosing to pay for COBRA to continue my health insurance coverage, even though it technically means I’ll be charging all my other expenses until I find a new job. I’m already giving up my house, but I will have to pay all the utilities, food, and any other necessities. I am willing to go into a relatively small amount of debt because the consequences of not having health coverage of my pre-existing condition for up to a year would be catastrophic to my health and increase my debt to astronomical costs. A single hospitalization could be tens of thousands of dollars. Even if I end up on COBRA for the max of 18 months, I would only pay $13,410. When stated that way it is basically a bargain. Even though it feels like I’m being asked to make a bargain with the devil.

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