I just lost my job last month and am struggling to pay my health insurance premiums. Is there anything I can do about this, short of dropping the insurance?

Shop around before being too hasty. If you have a medical emergency and no insurance at all, it could be financially devastating. And you probably have more options than you think.

I'm assuming because you were recently fired that you are paying COBRA insurance premiums. Named for the law that created it (the Consolidated Omnibus Budget Reconciliation Act of 1985), COBRA mandates that companies with 20 or more employees must let former workers continue their health coverage for up to 18 months after losing their jobs.

This can be a great benefit if you're in poor health or in a state with expensive individual insurance. But the prices are often shocking if your employer had helped cover your health-insurance costs. When you're on COBRA, you have to pay the entire cost yourself (actually, up to 102% of the total cost because of administrative expenses). According to a study by the Kaiser Family Foundation, the average employer-sponsored health insurance plan costs $7,954 in 2002 for family coverage -- with employees paying $2,084 of the bill and the employers picking up the remaining $5,870 of the tab.

If you're in good health and in a state with a competitive health-insurance market, however, you may have several other options. See if you can get a better deal elsewhere -- you can always drop the COBRA after you get another policy.

First, check with professional or alumni associations to see if they offer reasonably priced group policies. Next, check out prices for individual health insurance policies by calling local companies or visiting eHealthInsurance.com.

You'll only be able to qualify for your own policy if you're healthy, but you might find one that's a lot less expensive than your employer's coverage. You probably won't get a better deal in high-cost states like New Jersey and New York, but may find good options in competitive states like California, Florida, Georgia, Illinois, Michigan, Oregon, Texas or Washington.

When you get a list of possibilities, look carefully at the "details" section for each policy. Inexpensive individual policies don't tend to have as comprehensive as the policies offered by employers, so be aware of what you're giving up to lower your premiums and how that fits into the way you tend to spend money on health care. Increasing your deductibles and coinsurance levels can lower your monthly bill significantly, but may end up costing you more money in the long run if you visit the doctor quite often.

Also check out temporary health insurance. It often costs less, but tends to have more exclusions than group or individual policies, and usually only lasts for 185 to 365 days (depending on the policy). See my Keep Covered When You Lose Your Job column for more details.

MORE: Kiplinger.com | Your Money | Insurance | Column

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