HMO And PPO Health Plan: Options You Have After COBRA Ends

Written By: Kristaria Dawson on December 25, 2009 No Comment

Due to the challenge associated with obtaining health care during bouts of unemployment, the federal government decided in 1986 that there was a need to provide protection to these unemployed people. As a result, COBRA (or the Consolidated Omnibus Budget Reconciliation Act) was passed. As long as the unemployment was not due to ‘gross misconduct’, this law allows people who voluntarily resign, are laid off or terminated the right to extend their health insurance coverage for up to a year and a half at their expense.

In order to qualify for COBRA health insurance coverage, there are a few conditions that need to be met. First of all, your former employer had to have a group plan that a minimum of 20 employees were enrolled in, including yourself. You had to be working for that employer and a member of that plan for at least six months, too. If you qualify, your spouse and dependents are also eligible for COBRA continuation of coverage benefits, even when you decide against this coverage for yourself. Depending on the specifics surrounding your unemployment, you can get up to 36 months of COBRA.

The cost associated with COBRA continuation of coverage benefits is high. You will be responsible for 102% of the cost of the insurance, which can eat up almost all of your unemployment amount. This cost includes administrative fees which make it so expensive. There options to help you afford this cost; you can get assistance under the American Recovery and Reinvestment Act of 2009. This program will allow you to recover up to 65% of the premiums, but only for a period of nine months.

It is wise to take a look at individual health insurance policies either before your COBRA subsidy runs out or before you even elect to have this sort of coverage. Why? These plans can be more affordable than the COBRA continuation of coverage benefits. When it comes to individual coverage, you can choose between various HMO and PPO health plans. These are common health insurance terms for the main types of managed health care. With an HMO (Health Maintenance Organization) membership, you must choose a primary care physician who refers you to other specialists when you need services beyond their specialty. If you are a member of a PPO plan (Preferred Provider Organization), you are free to choose the providers for your care at your will, as long as they are in the network. Choosing one of of the network will mean that your claims are not entirely covered, or possibly not covered at all.

The pros and cons associated with HMO vs PPO insurance are simple to understand. Typically both of these plans are affordable, so cost is not normally a deciding factor. If you have a medical professional you happen to trust with all of your health concerns and you value preventative care, a HMO would be good for you. If you are one who would rather have freedom in your health care choices or may want to go to various specialists within your network, the PPO plan is a better choice.

Learn more about PPO vs HMO insurance. Stop by Kristaria Dawson’s site where you can find out all about HMO and PPO health plan options.