Health Insurance Options Similar to COBRA

When you're leaving your job, you're entitled to keep your current health insurance coverage for 18 months under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) if your employer had more than 20 employees, so long as you pay the monthly premium. The cost of this may come as a shock to you, as it's often several hundred dollars, if not more than $1,000. Look into COBRA alternatives if the cost is too high.

Individual or Family Plans

• Health insurance plans sell coverage directly to individuals. Look at the major companies in your area and get a rate quote from them. You may be able to reduce monthly premiums by choosing a plan without prescription coverage or with a higher deductible. If you are a relatively healthy person, this option could cost less than COBRA coverage. Some states have a special program that allows you to buy individual insurance at a reduced rate if your income meets certain criteria. You may not be able to get individual coverage if you have pre-existing conditions like diabetes.

Temporary Insurance

• If you're sure that your lack of insurance is only temporary--a few months--then consider getting temporary insurance. This typically comes with a very low cost, but it does not offer the full range of coverage that regular insurance does. It will cover major accidents or illnesses, but will most likely not cover pre-existing conditions or pregnancy. Temporary insurance carries limits on how long you can use it, usually less than one year, but sometimes just a few months, depending on the company.

Association Group Insurance

• The best deals on health insurance come when you are part of a group of buyers, which lowers the risk to the insurance companies. This is why individual insurance plans can be so expensive. Fortunately, professional organizations often offer group insurance plans to their members. If you are a member of an alumni organization or your local chamber of commerce, for example, ask the group if it offers health insurance plans to its members.