• Short Term Health Insurance Blog

  • Monday, November 20, 2017

  • Will This Cobra Sting? Basics of Insurance Subsidy

    Filed Under: Blogging

Short term health insurance is often seen as a viable COBRA insurance alternative. COBRA is usually more comprehensive in terms of benefits, but is also more expensive. However, the current economic scenario has made COBRA cheaper, with the help of COBRA insurance subsidy.

Many a time, people are confused about the relative costs of COBRA insurance vs. short term health insurance. Is COBRA really more expensive than short term health insurance? And what do these subsidies mean?

Basically, COBRA stands for Consolidated Omnibus Budget Reconciliation Act and seeks to ensure that those who lose their employment still have the option of continuing their current health cover. The U.S. Government passed an amendment, extended several times, of a 65% subsidy in COBRA premium. Currently, this subsidy is valid for those who lost their jobs through June 2.

Even with the subsidy, however, the average COBRA insurance plan will cost an individual around $400 a month. If the plan holder and his/her family are in good health, it is worthwhile to consider short term health insurance as a real alternative. It is best to take stock of several factors before making the decision, such as projected period that the insurance is needed for, chances of getting back on a long-term health insurance plan, and the affordability of COBRA.

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