Today is the last day of work for me. Hooray! I want to sign up on Nov 15 for ACA coverage and am eligible now for Cobra coverage. I have 60 days to elect Cobra. Is it wise to wait and not elect Cobra unless we have a need for insurance in November or December and save the $1050 per month coverage rate?
Cobra coverage
- Thread starter 2Muchfun
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Looking4Ward
Full time employment: Posting here.
That's what I did - I planned on paying for COBRA during the 60 day election period only if it became a "necessary business decision" for me and then signed up for a Bronze plan during the final weeks.
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Great timing! The strategy I used was to not decline COBRA, and not accept COBRA. If "something bad" happens in the next 60 days, you accept COBRA. Otherwise, you wait for your new coverage to start in January. If you accept COBRA now, you walk away from the PPACA subsidy. Access to COBRA is a question they ask in the signup, but AFAIK, that doesn't knock you out of being eligible for the subsidy. To be clear, access to is ok, but accepting and being signed-up is not.
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One Way to Analyze PPACA Policies
Shopping for HI on the marketplace can be quite different from the limited choices that your company may have offered. Here I'll outline how I proceeded.
I started out with the spreadsheet in this link: http://www.early-retirement.org/forums/f38/2015-aca-premium-increases-73339-3.html#post1487700
There is also another one in this link, http://www.early-retirement.org/for...tions-comparison-model-74215.html#post1510282, which I haven't tried.
But if you look at the inputs, you'll see that you'll need to specify how much and what kind of services you expect to use, so I had to step-back and look at history.
With my family of four, I saw that over the past 22 years, we really went to the doctor very few times. The records were spotty because of how things got paid for, but I did keep track over the years of every visit, even if it didn't have an associated payment (for instance preventive stuff, dental cleanings with the company plan, etc). But whatever YOUR case, you need to look back in order to look ahead for your expected usage.
Then I created a second scenario where somebody needed to go to the hospital on top of our regular usage. I presumed in this scenario that the person incurred expense beyond the out of pocket max.
I got two approximate values for a few categories of policies. The value was the sum of the premiums, plus the amount I'd be paying for services. Then I'd use a rough likelihood to get a single value.
So, for instance, selecting a policy that pays nothing until the deductible is reached and the premiums were $1000/mo, and I'd have 10 doctor visits at $135, that expected cost would be $13,350. And then for the SAME policy, I'd run a case for all of the above, plus, say, $10,000 for a hospital bill (but we'd hit the out of pocket maximum, so I'd only spend $5000). Then I'd guess that it's 5% likely we'll need hospitalization during the year, so that policy would have an expected cost to me of .05*17000 + .95*13350 = $13,532. This is the comparison number.
Then I would take another policy, say one that had a similar out of pocket limit, but covered 5 doctor visits a year in full, then a 20% copay for doctor visits. Since the math gets complicated, I just assumed that all visits would be free (giving this analysis an upward boost in the rankings). But still, if the expected scenario happened (10 doctor visits for free), the additional premiums on the policy exceeded the value of the free doctor visits. For instance, if the premiums were $1200 per month, then the expected value would be .05*19400 + .95*14400 = $14,650.
Since the second policy (free doctor visits) has an expected cost that exceeds the first policy (pay 100% up until deductible), I'd choose the first policy.
In this example, I had two scenarios. You could have more, so you might say scenario1*.80 + scenario2*.10 + scenario3*.10, but that was too much work, even for me!
The hardest part for me was pricing the scenarios against the various policies. This requires that you can translate between the words on the summary of benefits and how that affects what you pay for services. For me, with light utilization, the policy that paid nothing until the deductible was reached was hands-down the best bet. In fact, I'm going to research the over 30 catestrophic policies this year because what I'm buying is the out of pocket max, and they're all capped! So for me, at this juncture, no expensive meds, no frequent doctor visits, the insurance is only for "if something unexpected and bad happens".
On thing to remember when you're doing your historical medical utilization is that you need to subtract out anything that is considered "preventive" under PPACA; no matter what policy you get, that's not something you lay-out cash for.
So, there you have it, it's not easy. This will never happen, but it would be cool if you could build likely scenarios and drop each scenario on various policies and get an expected value for that scenario. Sort of like the example that's on the summary of benefits, but dynamic (no, I don't care how much it costs to have a baby!) At this point, you have got to know all the mechanics and slog through it.
Shopping for HI on the marketplace can be quite different from the limited choices that your company may have offered. Here I'll outline how I proceeded.
I started out with the spreadsheet in this link: http://www.early-retirement.org/forums/f38/2015-aca-premium-increases-73339-3.html#post1487700
There is also another one in this link, http://www.early-retirement.org/for...tions-comparison-model-74215.html#post1510282, which I haven't tried.
But if you look at the inputs, you'll see that you'll need to specify how much and what kind of services you expect to use, so I had to step-back and look at history.
With my family of four, I saw that over the past 22 years, we really went to the doctor very few times. The records were spotty because of how things got paid for, but I did keep track over the years of every visit, even if it didn't have an associated payment (for instance preventive stuff, dental cleanings with the company plan, etc). But whatever YOUR case, you need to look back in order to look ahead for your expected usage.
Then I created a second scenario where somebody needed to go to the hospital on top of our regular usage. I presumed in this scenario that the person incurred expense beyond the out of pocket max.
I got two approximate values for a few categories of policies. The value was the sum of the premiums, plus the amount I'd be paying for services. Then I'd use a rough likelihood to get a single value.
So, for instance, selecting a policy that pays nothing until the deductible is reached and the premiums were $1000/mo, and I'd have 10 doctor visits at $135, that expected cost would be $13,350. And then for the SAME policy, I'd run a case for all of the above, plus, say, $10,000 for a hospital bill (but we'd hit the out of pocket maximum, so I'd only spend $5000). Then I'd guess that it's 5% likely we'll need hospitalization during the year, so that policy would have an expected cost to me of .05*17000 + .95*13350 = $13,532. This is the comparison number.
Then I would take another policy, say one that had a similar out of pocket limit, but covered 5 doctor visits a year in full, then a 20% copay for doctor visits. Since the math gets complicated, I just assumed that all visits would be free (giving this analysis an upward boost in the rankings). But still, if the expected scenario happened (10 doctor visits for free), the additional premiums on the policy exceeded the value of the free doctor visits. For instance, if the premiums were $1200 per month, then the expected value would be .05*19400 + .95*14400 = $14,650.
Since the second policy (free doctor visits) has an expected cost that exceeds the first policy (pay 100% up until deductible), I'd choose the first policy.
In this example, I had two scenarios. You could have more, so you might say scenario1*.80 + scenario2*.10 + scenario3*.10, but that was too much work, even for me!
The hardest part for me was pricing the scenarios against the various policies. This requires that you can translate between the words on the summary of benefits and how that affects what you pay for services. For me, with light utilization, the policy that paid nothing until the deductible was reached was hands-down the best bet. In fact, I'm going to research the over 30 catestrophic policies this year because what I'm buying is the out of pocket max, and they're all capped! So for me, at this juncture, no expensive meds, no frequent doctor visits, the insurance is only for "if something unexpected and bad happens".
On thing to remember when you're doing your historical medical utilization is that you need to subtract out anything that is considered "preventive" under PPACA; no matter what policy you get, that's not something you lay-out cash for.
So, there you have it, it's not easy. This will never happen, but it would be cool if you could build likely scenarios and drop each scenario on various policies and get an expected value for that scenario. Sort of like the example that's on the summary of benefits, but dynamic (no, I don't care how much it costs to have a baby!) At this point, you have got to know all the mechanics and slog through it.
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pb4uski
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
What you describe is the approach I use as well. Essentially we are creating some plausible alternatives and calculating an expected value of the cost of each alternative and selecting the alternative with the lowest expected cost. Actually, my HI provider website has a Q&A tool where you indicate the number of PCP and specialist visits you expect to have, info on your Rx and they provide estimated costs for each policy they offer (low is premiums only, middle is with visits indicated and max is MOOP) and is helpful in comparing plans. Since we are healthy and have minimal claims ($0-$3k/year) the cat policy has been best for us.
One thing I'll mention is to look carefully if your policy is for more than one person how deductibles work. We found that we were better off to have individual policies (one for me and one for DW) rather than one policy for both of us because the deductibles were aggregate rather than stacked.
One thing I'll mention is to look carefully if your policy is for more than one person how deductibles work. We found that we were better off to have individual policies (one for me and one for DW) rather than one policy for both of us because the deductibles were aggregate rather than stacked.
Thank you for all your feedback. I read somewhere that to get a subsidy you must purchase a Silver Plan. Is that accurate or perhaps an old rule? I do see subsidy discounts in all of the "metal" plans when I review this. My income is low after FIRE; only reporting a small amount in dividends and capital gains (expected) in my taxable account, plus some (planned) Roth conversions.
Corporateburnout
Thinks s/he gets paid by the post
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So if you don't decline COBRA and you had a claim during the 60 days wouldn't paying the premiums disqualify you for the subsidy for the remainder of the year? Would you then continue to pay the COBRA rates for the year?
Cost-sharing is part of the Silver plans if your income is not over 250% FPL. The "subsidy" tax credit can be for any metal plan.
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Yep. You'd be stuck with COBRA if you made a claim after your employee COBRA ran out (in my case, my last day of work).
So you'd need to do some quick thinking if you had something happen in those 60 days. Hospitalization, yep, pay the COBRA bill. Need a script for poison ivy in those 60 days? Pay cash at the doc in the box.
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