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Top 3 Reasons Why Short-Term Health Insurance Is Better Than COBRA

When you’re facing a loss of medical coverage due to temporary gaps in employment or another factor, purchasing COBRA coverage could initially seem like the right choice to protect your health and finances. Under COBRA Act, employers with 20 workers or more are required to offer an opportunity for former employees to continue paying out-of-pocket for health insurance coverage.

COBRA is definitely far from cheap, however, costing 100 to 150 percent of your monthly premium, for an average of $13,000 a year. Short-term health plans are often a better alternative to COBRA especially when you’re facing a need for immediate care or your finances are tight.

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Temporary health insurance is a popular, affordable solution to cover gaps in coverage while you are between Major Medical plans.

*Eligibility for short term medical insurance is based on age and state availability.

1. Faster Access to Insurance Coverage

While you’re entitled to 60 days to decide between COBRA, coverage doesn’t begin the minute you submit your paperwork. Generally, individuals can expect a processing time of three to four weeks. Not only is it a lengthy process, but you’re also responsible for paying the full initial premium; effectively paying retroactively for coverage from the moment you left your job.

In contrast, health insurance plans for short-term coverage allow you to access coverage much more quickly, sometimes as soon as the next day.

2. More Flexibility & Features

With COBRA, your ability to make changes is limited to dropping coverage. Once you’re discontinued, you’re not able to reinstate COBRA. If you want to change plans, you need to wait until the next open enrollment period.

Short-term health plans offer superior flexibility and features, allowing you to shape your coverage to fit the immediate needs of your family

  • Up to 90 days of coverage
  • Pick your physician
  • One family deductible
  • Customizable deductibles and co-pays

3. Private Insurance Has Superior Value & Much Cheaper Than A COBRA Plan

There’s no question that COBRA is costly. While it guarantees continuing health insurance after quitting job, getting laid off or retiring, your former employer is no longer subsidizing your monthly premium. Monthly out-of-pocket costs can more than double, leaving you on the hook for a massive payment as well as your deductibles and co-pays.

Short-term medical insurance is generally far less costly than COBRA coverage. You’re able to customize your coverage to fit your budget, selecting between high-value plans, options for catastrophic coverage with an affordable monthly premium and more.

Am I a Good Candidate for the Short-Term Medical Insurance Plans?

Making the right decisions on health insurance products can be challenging, especially if you’re facing periods of life transition. While gaps in employer-provided coverage are one of the most common reasons people may consider COBRA, other reasons for eligibility include:

  • Aging out of parent’s coverage
  • Waiting for benefits at a new job
  • Divorce or separation
  • Early retirement

For some individuals who are facing extended gaps in coverage and a need to maintain continuity of care for chronic health conditions, COBRA may be the right choice. However, for most other individuals, purchasing a short-term health plan that offers 30-90 days of coverage offers far more value at a much lower cost. In some states, you can purchase plans consecutively to extend affordable insurance access beyond three months.

Depending on the plan you select, you may be able to access up to $1 million of coverage for:

  • Physician office visits
  • Surgery
  • Hospitalization
  • Home health care
  • Extended care
  • eHealth visits
  • Prescription coverage

Why Flexible Short-Term Coverage Is Likely the Smarter Choice

For hundreds of thousands of individuals who are facing a gap in health insurance, enrolling in a short-term health plans is a better decision than opting for COBRA. With flexible options to fit your health goals, needs, and finances, short-term coverage can provide critical peace of mind during periods of transition.

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