I just got laid off and my insurance broker told me that I should buy individual coverage as soon as possible instead of COBRA because I have a history of cancer in my family. He said that if I develop cancer while on COBRA, I’ll never get coverage because of my pre-existing condition. True or False?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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False, but unless COBRA is better coverage at a significant discount (as it has been for those laid off during the Stimulus Package federal government subsidy), you might find individual coverage preferable anyway because it is less expensive than the guaranteed issue coverage.

Let’s assume you are on COBRA and develop cancer. You won’t be left without coverage at the end of COBRA. Nor will you be offered only very “limited conversion” coverage. You may think of HIPPA as a “privacy law” but the second “P” in the name stands for “Portability” (Health Insurance Privacy and Portability Act). By law, you must be offered the same plan which was deemed the most popular individual plan sold by that carrier in the prior years. That means you will be offered a high deductible (because people who pay for plans by themselves never buy low deductible, high cost plans). The plan, though, is exactly the same benefits purchased by most consumers, at a price no greater than 50% higher than the healthiest individual would pay. Since you are coming from COBRA (“Creditable Coverage”), no pre-existing condition clause would be applied, and your cancer would continue to be covered. The 2010 HealthCare Reform law will, six months after enactment, prohibit many plans from placing lifetime limits on medical coverage.

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