To COBRA or Not to COBRA

My mom would say get your ass on COBRA asap, but she doesn’t understand the financial implications of COBRA healthcare costs when you’re unemployed.

Last time I had the opportunity to go on COBRA after losing a job, I had been on a PPO plan (a really good one) so I was looking at $405 a month for continued healthcare coverage (not counting all the extra copays and such I’d actually have to spend if I ever went to a doctor.) I denied my COBRA coverage — that time I didn’t even have unemployment since I was talked into “resigning” my a boss who was otherwise going to fire me (I just didn’t have the chops to be a full-time journalist-blogger, go figure) so COBRA coverage, which cost half my rent, wasn’t much of an option. At the time I also thought I’d be able to find cheaper high-deductible insurance for just-in-case problems for less. And soon I discovered that my health history of having irregular periods and treatment for depression disqualified me from being able to get any sort of health coverage without lying on my application. So eventually I lied and spent $150 a month on healthcare with a $5000 deductible which could be revoked at any time if they found out that my periods were in fact irregular or that I sought treatment for being depressed. Which made me EVEN MORE depressed.
This time, I thought maybe since I was in a high-deductible plan at work my COBRA coverage wouldn’t be as expensive. It was a decent plan, but only due to my company putting in an extra $150 a month into our HSA accounts. So the plan, which has a $2000 deductible, wasn’t a bad deal. Now, on COBRA, it’s going to cost me about $300 a month to stick with this plan. So that’s an extra $3600 per year which… only covers freak accidents that would otherwise cost my life savings. Worth it? Not so sure. Possibly. Especially since I won’t be able to get other, more affordable coverage which most people would recommend to a girl in her 20s. Because my periods are irregular. And I’m sad on occasion.
I wish Obama could get his act together on healthcare. I’m not sure what a person like me should have to pay for healthcare, but these costs just seem prohibitively high. More so, I feel it is unfair for the health care system to kick me out just because my ovaries are not perfect and I actually sought help for my depression so I could get back to being a productive member of society. I learned my lesson then to NEVER pay for mental health care using health insurance (even if the booklet they send out makes you think it’s a good idea.) At least with an HSA plan it really doesn’t matter a whole lot if you pay through insurance because ultimately you can use your HSA money for therapy, and if you pay with insurance you’ll basically have to pay the whole fee anyway, it will just go on record. It may cost a little less since the few therapists who take insurance these days are forced to charge a fee which is lower than what they’d want to charge, but then you’re also extremely limited to which therapists you can see. So for now I am seeing a woman who is an intern in a psych program who is letting me see her for $20 a session. I don’t think she’s the best therapist ever, but right now, having someone to talk to weekly so I don’t jump of a bridge is important, and I can afford $80 a month for that. $300 a month for basically nothing but insurance is a little hard to shell out when after taxes your unemployment income is maybe $1500 a month. If I ever get the unemployment income, I’m still working on figuring out if I’m eligible, etc.
This all limits the otherwise decent option of seeking out contract work. I know a few people were angry at me at my post where I asked… should I do contract jobs while getting unemployment (since doing work lessens your unemployment pay) but in reality you’d make more doing NOTHING because contract jobs require you to pay 15.3% more in taxes just because you’re considered self-employed. Unemployment pay, as far as I know, doesn’t require you to pay the extra 15.3%. I agree that I should not be lazy and mooch off the government, but it seems silly to do work to make less then I’d make by instead spending my time job hunting and even teaching myself new skills. And my current contract job is not going to lead to a full-time anything, it’s just a freelance blogging gig where I can make up to $500 a month, I’ve been doing it for over a year now, and it was nice extra income when I had a job, but now it’s the question of doing that and making less than I would on unemployment or just going the unemployment route. And I’m not sure what to do…
For now, I need to figure out if I’m going to go COBRA or without healthcare again. What do you think I should do?
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5 comments

  1. Jerry says:

    That's a lot and I'm sorry. When I got laid off I had to pay $1200 for me and my family. Ouch. That's a lot of cash, too. I hope the legislation that is in the Senate leads to something that works for everyone.

  2. me in millions says:

    It's not Obama that needs to get his act together on healthcare… It's your senators and congressman, especially the Republican ones who consider it to be "socialism".

  3. Sarah says:

    I'm in the same boat, sort of. I quit my job last Friday (FINALLY), and my new job will start March 8th. With my new job, I'll have to go through a 3 month waiting period before I'm even eligible for health insurance, and even then, half of the cost of the premium will be deducted from my paycheck. That's about $225/month. Which means, for a few months at least, I will either have to do COBRA, which will cost me around $450 (even though it's an HMO), or do NOTHING, which will cost me about $80/month in state-assessed penalties for not having health insurance (thanks, Mass), and risk that something might happen. I also have PCOS and see a therapist for depression, which means I would be screwed applying for insurance on my own. I'm not sure what to do.

  4. Janet says:

    You don't mention it, but don't forget the government picks up 65% of the tab for COBRA right now if you were laid off before Feb 28th 2010.

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