Pros and Cons Archives - Innovative Health Insurance Advisors

When seeking out health insurance coverage past when it’s partially covered by your previous employer, how do you choose between picking COBRA or private health insurance? Both have pros and cons. The right choice, however, depends on your unique circumstances.

Let’s discuss the pros and cons of COBRA vs. private health insurance.

What is COBRA?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is not insurance itself. Alternatively, COBRA is a law that was passed in 1985.

This law, COBRA, allows employees to continue on their existing health insurance plan if:

They are reduced to work less than 30 hours a week, or
Leave their job voluntarily or involuntarily

Under COBRA, the employee continues on his or her insurance plan but is then responsible to cover the entire cost. It is no longer the employer’s responsibility to cover health insurance premiums as they had previously.

COBRA, however, is not available to everyone. COBRA is only available to employees who worked at a public or private company with 20 or more employees.

What is Private Health Insurance?

Private health insurance, on the other hand, is any health insurance policy plan that is not run by a government-run insurance plan (i.e. Medicare, Medicaid, Obamacare).

This type of coverage, though not government-run, must comply with state and federal insurance regulations.

Depending on the type of insurance policy, regulations include:

Affordable Care Act (ACA) essential health benefits
Maternity care
Meeting minimum essential coverage (MEC) requirements
Providing minimum value to avoid employer mandate penalty
Capping in-network and out-of-pocket costs

Pros and Cons of COBRA

Pros of COBRA

COBRA allows you to keep your same health insurance policy in the event you lost your job voluntarily, involuntarily, or through a reduction of work hours.
COBRA is an added security in case an unexpected life event occurs while you are unemployed.
Beneficiaries continue the same coverage for preexisting conditions and prescription drugs.
With COBRA offering an extension of your health coverage, you don’t have to pay for medical expenses out of pocket (i.e. doctor’s visits). Instead, you are still privy to the same group rate as the one you had with your previous job.

Lastly, you can use COBRA coverage for 18 to 36 months depending on why you need it. Plus, it can be extended depending on qualifying events.

Cons of COBRA

COBRA coverage is not cheap. Why? Because you’re now responsible for paying your portion of your health insurance: The cost you
r employer contributed to your premium, in addition to the 2% service fee on the cost of your insurance.

A COBRA premium can cost on average $400 to $700 a month per person.

Calculate the Cost of COBRA

In order to calculate the cost of COBRA continuation coverage, add how much the employer contributes to the health plan, plus how much the employee contributes to the health plan, then multiply the sum by 2% for the service fee.

Please see the formula below:

(Employer contribution to coverage + Your Contribution) x 0.02% = COBRA Premium)

For example, an employer who contributes $400 a month for an employee who contributes $200 a month would bring the total to $600 towards contributions. Multiplied by the 2% charge, the COBRA cost each month would cost $612 each month.

Pros and Cons of Private Health Insurance

Pros of Private Health Insurance

If you use private health insurance, you have the flexibility to choose a policy that works best for you.
In addition to building your own policy, sometimes you can also choose your own physician.
Those who choose to use this type of health insurance coverage are also privy to greater coverage options and flexibility, shorter wait times, and better facilities

Cons of Private Health Insurance

Private health insurance is even more expensive than COBRA. Some policies may only cover up to 80% of the cost of care.
Private health insurance may offer limited coverage options depending on disease and condition.

Insurance premium costs are on the rise and show no sign of slowing down. As time goes on, the price of private health insurance is expected to continue increasing. Research found the national monthly average of insurance costs in 2022 sat at $541.

The Bottom Line

Both COBRA and private health insurance will help provide the security of having health insurance if you no longer have access to employee benefits. Weigh the pros and cons of each to see which policy fits your needs best.

Still have questions? Reach out to our expert team of brokers and visit our COBRA page to learn more.

Amid a global pandemic, the implementation of telemedicine has risen significantly over the last two years. Telemedicine can be a great way to communicate with your doctor in the safety of your own home. There are, however, pros and cons of telemedicine.

Virtual visits can be used to detect symptoms of COVID-19, fevers, rashes, cold and flu symptoms, aches and pains, minor musculoskeletal injuries, small infections, and UTIs.

While this service can be an effective way to treat patients, there are pros and cons of telemedicine to consider.

Pros Associated with Telemedicine

Let’s discuss some of the pros associated with telemedicine.

Convenience

According to a study, 74% of patients prefer easy access to healthcare services over in-person appointments. Not only does this provide convenience for all patients, but also it helps those who live in remote locations gain access to proper patient care.

Saves Time

Participating in a telehealth visit saves a patient time. Patients can participate in a telehealth visit from anywhere in the world using a mobile device, computer, tablet, or laptop.

Additionally, this service creates ease for those who would normally have to travel long distances for appointments. Moreover, a study found that patients wait an average of about 18 minutes in the waiting room. Telehealth helps to reduce wait times in the waiting room.

Cost-Effective Options

These services significantly reduce healthcare service costs. Telehealth helps to:

Attract new patients
Reduce no-shows
And reduce overhead for physicians who decide to utilize telemedicine

Minimizes Unnecessary Visits for Patients

As a patient, it can be a waste of time and money to go to the doctor or ER for minor medical consultations. If your symptoms do not require an in-person visit, opt for a telemedicine appointment instead!

Improved Access to Care

Patients who face physical challenges to see a healthcare provider now have the ability to seek care through virtual visits. People with physical disabilities, the elderly, and those living in remote areas can face challenges reaching the doctor’s office.

With the rise of health care shortages, in-person visits can be especially challenging to book. Virtual visits allow those who face physical challenges to speak to an expert without barriers.

Furthermore, virtual visits allow patients to speak with specialists who do not practice nearby. For example, a patient in San Francisco seeking a consultation from a provider in Los Angeles can schedule a virtual visit and receive the same quality of care with ease.

Telemedicine Can Lead to Improved Healthcare Quality

When it is easier for providers to engage with patients and remotely track their health with monitoring systems, they can work to identify problems as they develop.

A study by the American Journal of Medical Care found that patients who participate in telemedicine visits experience lower levels of depression, anxiety, and stress, and have 38% fewer hospital admissions.

Cons Associated with Telemedicine

Now, let’s identify some of the cons associated with telemedicine.

In-Person Visits Can Be Necessary to Diagnose

Physical exams are impossible over the phone, which may be necessary for the diagnosis or treatment of a patient. For example, the COVID-19 test requires a nose and throat swab, so you must go to the doctor physically.

Security Concerns

With the relaxation of telemedicine requirements due to the global pandemic, security concerns may arise. Cybercriminals can hack into telemedicine systems to steal personal healthcare information.

You May Not Know the Doctor Providing Your Care

Utilizing virtual care services may mean you have a stranger on the other end of the call. These doctors will likely be unfamiliar with you and your unique medical history, which could affect the level of care they can provide.

Limited Technological Access

Not everyone has the same access to technology that makes telemedicine accessible. The elderly, minorities and those with lower socioeconomic status may not always have access to the technology needed for a virtual visit.

Training and Equipment Can Be Expensive

Reorganizing IT staff to train and create effective equipment requires both time and money. To ensure an ROI from implementing telemedicine, staff, physicians, and medical staff needed to be trained properly.

Although there are a few things to work out within telemedicine technology, as you work to implement telemedicine into your benefits programs, the benefits of telemedicine can make a large impact.

At Innovative HIA, we believe in the power of telemedicine. That’s why we offer free telemedicine programs in all of our benefit programs. Learn more here.

Or, continue reading for five reasons you should use Telehealth.

Article originally published by SBMA Benefits.

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Pros and Cons of COBRA vs. Private Health Insurance