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Recession drives home benefit of comparing insurance costs

From staff reports

Peggy Christensen had long taken health insurance for granted. Even though her husband is self-employed, she'd always been able to enroll her entire family in her employer-sponsored plan.

Then in March, she lost her job and the family's safety net was pulled out from under them.

"We've been without insurance since then," said Christensen, 37, a former manager at a technology consulting firm.

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The number of Americans losing their jobs and their health insurance continues to increase in the wake of the economic recession and the Sept. 11 terrorist attacks.

An estimated 911,680 people have lost their health coverage and their jobs between March and November, according to the consumer health organization Families USA. And individual insurance is in the spotlight, as the Bush administration pushes tax credits as a way to help Americans buy insurance.

But it's no longer just the unemployed who are shopping around. More products and services are becoming available as double-digit increases in premiums force some workers to abandon their employer-sponsored plans for cheaper options.

Entrepreneurs, the self-employed and small business groups are also comparing benefit and premium data.

One thing most experts agree on: You should avoid going without insurance -- waiting until a condition develops will cost you more money.

If you lose your job, employers must tell you that you're entitled to continue your health care coverage through COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act.

Under COBRA, employers must offer you the opportunity to continue health coverage for at least 18 months. You pay the full health insurance premium, plus a 2 percent administrative fee that your former employer may charge. This is often a consumer's most expensive option.

Christensen found she couldn't afford COBRA.

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Now she faces the seemingly daunting task of purchasing insurance in the individual market.

While she was forced into that situation, others, like Mark C. Smith and his family, shopped around to find a better deal. And their new insurance will save almost $500 a month.

The family had been insured by a national carrier that offered maternity coverage -- a rarity in the individual market. Smith's wife, Julie Smith, delivered their youngest daughter, Amanda, nine months ago. But since then, the insurer notified them that their monthly premiums would rise from $609 to $816 a month.

"Premiums have gotten so expensive that I've been forced to consider that maybe self-employment is not the place to be," said Smith, 33, of SimulRing.

Meanwhile, his insurance agent found him a plan for just over $300. It doesn't cover maternity, but it otherwise offers a full-range of services.

"I definitely would suggest shopping around," he said.

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