Reducing COBRA Health Insurance Costs
With COBRA health insurance premiums being a significant expense, what can you do to lower the cost? The odds are that if you are facing COBRA coverage, you don't have a lot of other options and might be stuck. Still, here are a few techniques to reduce the cost of spendy COBRA premiums:
Negotiate with your employer. If you are leaving your employer due to downsizing or response to a slower business environment, your employer may be pained to let you go and offering you a severance package. In many cases, they may be receptive to including COBRA premiums for 1, 2, 3, or more months as part of the package. This benefit, however, may be taxable to you. Your employer may also find it simpler to bulk up the amount of your severance payout by the amount you will need to purchase your own premiums.
End early in the month. When your employer pays your health insurance premiums, they typically pay by the month. Therefore, if you end your employment on the 2nd of the month, for example, you will likely be coverage under your existing policy through the end of that month. If you have any control over the situation and can dictate your end date, try to push ahead into the first day or two of the new month.
Inquire with your healthcare provider. Healthcare providers, especially large hospitals, know that they are likely to get paid for services more fully and more timely from insurance companies than from patients. If you have a chronic condition requiring regular, expensive care, or if you are about to go through a major medical procedure (e.g. delivering a baby, knee surgery, etc.), you may find that your provider is willing to cover or at least offset the cost of your COBRA premium. They would rather seek payment for that labor and delivery from Blue Cross than from a patient - Blue Cross has a much better payment history on large claims than the average patient. Typically, there will be an employee with a title of Financial Counselor or Patient Advocate who could assist you with the process.
Look for better options. If your employer is small or has a health insurance plan with all the bells and whistles, you may actually find it is less expensive to go to the open market to find your health insurance than to purchase COBRA. Do your homework and make the best decision for you and your family.