The Health Insurance Question

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One of the biggest concerns when you lose your job is where to find health insurance. Unfortunately, Health Insurance is both a communal and personal issue, hugely complex, and more often than not, incredibly confusing. With health insurance you can simultaneously have hundreds of options and no choices. Sure, there's COBRA, but it's usually prohibitively expensive. Your severance package may cover you for a short time, but it's only a stop gap at best. Getting good coverage on your own from a private insurance company is usually next to impossible, especially when you're living off unemployment.

The choices you make will be hard ones, and could have dire consequences either way. No one can tell you exactly what to do (and I'd be wary of anyone that claims to). What you can do, however, is seek out information. Avoid politicized sites. Stick mostly to government and state websites. I would not recommend going to Wikipedia to get information itself, but it's not a bad place to get started. Mainly, look at the external links and references area to find more credible websites that will help you.

First off, let's look at COBRA. The acronym actually stands for Consolidated Omnibus Budget Reconciliation Act (of 1985). It was signed into law by President Ronald Reagan, and among other things, it allowed someone to continue their health insurance coverage after losing a job. However, rather than requiring your employer to continue paying for your coverage, you are personally given the option of picking up the bill. Unfortunately, employers often get group discounts from the insurance company. This means that if you want to continue your coverage, you're going to end up paying far more than what was taken out of your paycheck every week. COBRA is, in fact, often prohibitively expensive. But at the same time, it's worth checking out. And really, a great place to find information about this is your state unemployment office or dislocated workers office.

Your other option is to exercise the free market strategy and try to find a private insurer. Unfortunately, these are also often very expensive. There are some plans that might fit into your budget, but you typically don't get what you're paying for in terms of coverage. However, there are situations where you're going to need coverage—any coverage—in order to make it through until you find another job. For example, if you currently have a condition that forces you to purchase a lot of medication, prescriptions, or medical hardware, you'll have to think about COBRA. If what you need in order to survive or stay healthy is, on a monthly basis, more expensive than COBRA, you'll be saving money by continuing your plan. Additionally, it might be difficult for you to find different coverage because you'll have a “preexisting condition.”

Preexisting conditions are something you need to be incredibly careful of. If you have a chronic or long term illness, other insurance companies will be hesitant to pick you up, and they won't cover any of the costs of your chronic illness, because you were diagnosed before you were insured. If you are diagnosed with cancer while you are unemployed and you do not have insurance, even when you regain some coverage, you will have to pay for the cancer treatments out of pocket because it would then be a “preexisting condition.” If you happen to get sick while you're uninsured, it could make future health care very difficult. That said, your health is more important than anything, and you should never postpone going to a doctor because of insurance problems. You have to take care of yourself, first and foremost.

Finding health insurance while you're unemployed is, unfortunately, very difficult. It seems to be filled with more hazards than benefits, but that's why you need to take some time and make the decision that's right for you. If you can afford it, you definitely do not want your coverage to lapse, because if anything does happen, it will hurt you far more in the long run. That said, sometimes you just can't afford it, and you've got to do the best you can. Health insurance is tricky, and sometimes, even if you do have it, your plan won't cover all of your costs. In the end, you've got to do what's best for you and your family.

Now that you have read about Vital Accessories, may we suggest that you take the next step and check out Getting Your Finances in Order. It is important to us that we are able to help people as they recover and prosper after job loss, so please contact us with suggestions, corrections, and even your personal experiences. If you found this article or video to be helpful, we'd love for you to share it with a friend. Also, be sure to check out all of the amazing resources for your career transition in the Book Store!

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