According to the Washington Post there are a growing number of unemployed Americans who have no job and no health coverage. The cost of buying heath insurance through a former employer for those unemployed Americans consumes 30 – 84 percent of standard unemployment benefits, which few people can afford. COBRA was introduced to newly unemployed Americans to extend their employer-based health insurance.

Most people don’t understand if they should sign up for their COBRA coverage. If you are healthy, then you should always compare your COBRA pricing against individual insurance. Most people find that individual insurance is 30%-40% less expensive then the COBRA coverage. The reason for this is quite simple. COBRA coverage costs 102% of the group coverage that the former employer offers. Individual health insurance is less expensive because the carrier assesses your health insurance risk based on your age, weight, sex and zip code. Since this pool of people is much larger than most group plans the cost of the insurance is lower. If you are not healthy then COBRA coverage may be your best short term option but remember COBRA coverage expires after 18 months. This means that if you get sick during the time period that you have the COBRA coverage your insurance can expire while you are ill. Again, the best way to avoid this situation is to purchase individual insurance as soon as possible and not take the COBRA coverage. In addition, COBRA is not considered credible coverage by insurance carriers after the initial 63 days. Given how expensive COBRA is individual insurance would save the individual and taxpayer money. It’s wiser to search for a broad range of health insurance options and see what best fits your needs and budget.