Critical Condition - October 12, 2005

About to graduate? Need health insurance? Here’s your guide to COBRA.

By Kate Steadman, UC Santa Cruz
Wednesday October 12, 2005

Critical Condition is Campus Progress’ bi-weekly health care column.

 
I just graduated from college and I don’t have health insurance! What do I do? Do I even need it? I only broke my arm that one time when I was ten.

Contrary to what your good health leads you to believe, you always need health insurance. No exceptions. You might not always use it, but in case you contract the flu from that person you probably shouldn’t have kissed, or, heaven forbid, get in an accident, you’ll want it. Even minor accidents can easily ring up into thousands of dollars in medical bills (like breaking your leg snowboarding, but needing special surgery to get it fixed correctly). Add that to student loans, and … let’s just say they recently changed the bankruptcy laws, and now you really don’t want to go down that road.

Okay, now I’m just scared.

I actually have a solution. In 1986 Congress passed the Consolidated Omnibus Budget Reconciliation Act, or COBRA, and it’s a lot friendlier than it sounds. Many health plans for families will only cover children as long as they are in school, and if you just graduated, you probably lost your insurance. COBRA is a way of keeping the same health insurance you had before you had to sever those school ties.

Is this just a special program for people who are too lazy to get a job after college?

No way! In fact, COBRA was primarily passed for people who just lost their job – and the health insurance that went along with it. You can also use COBRA if you were just divorced, retired, or if your spouse lost his or her job. Basically, if you just lost your health insurance, or were dependent on someone else’s health insurance for your own, COBRA entitles you to pay a certain amount every month to keep your insurance, for up to 18 months. If you lost your coverage because you lost your status as a “dependent child” (i.e., graduated) you can keep your insurance for up to 36 months in some cases.

So what kind of insurance is it? Do I have to go to a different doctor?

COBRA isn’t an actual insurance company, it’s just the name of the bill. The great thing about COBRA is you get to keep the same insurance you had before. If your plan is no longer available or has changed, your new plan must be the same as those offered to insurance enrollees who aren’t paying COBRA. Basically, the insurance company can’t make you pay more for a smaller plan, or change the rules of your plan because you’re now paying COBRA. You can also use COBRA to pay for your vision and dental coverage, even if different companies offer them. You can’t keep paying your life insurance, but that’s usually not a concern for us recent grads!

Can I go get it right now?

You can, but there are a few exceptions to keep in mind. First, if your parent worked at a company with less than 20 employees, you can’t buy COBRA. Some church-sponsored insurance plans aren’t eligible, as well as plans offered by the federal government. Plans sponsored by the federal government can be continued under a different law. If were fired or layed off, you can get COBRA coverage, but not if you were let go because of gross misconduct. Keep that in mind in case you ever plan on leaving a job with a “bang” – you’ll be disqualified from paying COBRA.

Does it cost money? Because I’m trying to save so I can move out of my parents’ house.

Until now I’ve painted a rosy picture of COBRA. It meets an essential need, and keeps Americans from being slammed with medical bills. You even get to keep the same doctor. But like most good things, there’s a downside: cost. When you elect to pay COBRA, you have to pay the total cost of your health insurance. Unless you were self-insured, your employer (or your parent or spouse’s employer) paid a certain amount of your health insurance every month, and you paid the rest. Under COBRA, you are responsible for the full amount. Further, the insurance company can charge up to 102% of the cost of your plan, so you might pay a few dollars more.

Now I see why it’s named after a snake. I really need to move out soon, should I pay for COBRA anyway?

Last week we talked about how expensive your other option if you lose your health insurance, self-insurance, can be. Even though you have to pay the full cost, COBRA may cost less than self-insurance if you have pre-existing medical conditions, because buying self-insurance is more expensive and less protective if you have serious pre-existing conditions. With COBRA, you keep your same network of physicians and you have thorough coverage. With self-insurance, you will probably pay a whole lot for bare-bones coverage that leaves you feeling like you don’t have insurance at all. COBRA is well worth the cost. If you can’t pay it, try negotiating with your parents, your grandparents, whoever you can.

With student loans, expensive bar tabs, and saving for your own place, health insurance often becomes an afterthought. But insurance is not something to skip, even with your normal expenses. It’s difficult to know where we’ll be in five years, but if you don’t have health insurance and something happens, you can plan on being in debt. So look into COBRA, because going without just isn’t worth the risk.

 
Kate Steadman, a native of the reddest of red states, Kansas, graduated from the University of California, Santa Cruz in June with a B.A. in sociology and pre-med requirements fulfilled. Kate has worked at the National Women’s Health Network in Washington, D.C. and the Venice Family Clinic, the largest free clinic in the nation, in Los Angeles. She has an unhealthy fascination with health care and will be moving to Washington , D.C. to work in health policy. When she’s not reading about health issues, she enjoys staring at her computer, listening to NPR, and knitting.

If you have a question or suggestion for Kate regarding Critical Condition, contact her at ksteadman@gmail.com.