COBRA....if I pull the cord, how bad is this cost for 2 people?

[Floridatennisplayer]

I am 63. Planning on retiring in March at age 64. Just checked...my COBRA for Aetna PPO and dental comes out to right around $17,600 per year. It’s a $1,000 deductible.

Just my wife and I. No pre existing conditions. What say ye wise ones?

[sengsational]

If you won't be earning any significant money (i.e. you qualify for PPACA), I'd explore that. The coverage from those healthcare.gov plans wouldn't be as "good", but the premiums would be a whole bunch cheaper. Just because you qualify for COBRA doesn't lock you out of getting a plan on the exchange.

[Dtail]

Quote:

Originally Posted by sengsational If you won't be earning any significant money (i.e. you qualify for PPACA), I'd explore that. The coverage from those healthcare.gov plans wouldn't be as "good", but the premiums would be a whole bunch cheaper. Just because you qualify for COBRA doesn't lock you out of getting a plan on the exchange.

+1
If you can manage your MAGI for one year, the rates in FLA in general are very reasonable.
A solid Silver Plan should cost you much less than 17k. If you are expecting major dental work, then that could affect the decision.

[pb4uski]

What you are evaluating is part of the cost of freedom. How much is getting to do what you want to do every day rather than what the boss wants you to do worth to you? Are you willing to pay the price for freedom to do what you please?

My COBRA, even with high deductibles similar to a bronze plan, were higher than what was available in the individual market.

If you are both in good health and have few claims, I would look for a bronze high deductible policy for the premium savings rather than go with a higher level plan. With the higher level plan you are essentially guaranteeing that you pay the deductible of a lower plan because the difference in deductibles is built into the premium.

Also, check out healthsherpa.com.

[VanWinkle]

Quote:

Originally Posted by pb4uski What you are evaluating is part of the cost of freedom. How much is getting to do what you want to do every day rather than what the boss wants you to do worth to you? Are you willing to pay the price for freedom to do what you please? My COBRA, even with high deductibles similar to a bronze plan, were higher than what was available in the individual market. If you are both in good health and have few claims, I would look for a bronze high deductible policy for the premium savings rather than go with a higher level plan. With the higher level plan you are essentially guaranteeing that you pay the deductible of a lower plan because the difference in deductibles is built into the premium. Also, check out healthsherpa.com.

You have 60 days to decide on the cobra I believe after leaving your job. The coverage is retroactive if you need it. I would check the ACA premium for a high deduct/bronze plan and compare before pulling the trigger on either one. If you can keep your income below 64,000 by pulling from a taxable account/savings account, you can get considerable subsidies for the ACA plan.

[iloveyoga]

As mentioned above, the cost of freedom.

[TwoByFour]

Quote:

Originally Posted by Floridatennisplayer I am 63. Planning on retiring in March at age 64. Just checked...my COBRA for Aetna PPO and dental comes out to right around $17,600 per year. It’s a $1,000 deductible.

That sounds like a lot to me, like it is not much of a group plan and you are paying 100% of premiums. If so, there is no advantage to the plan and you should shop around. Good news is you are close to Medicare age which is far cheaper.

As a reference, I paid $6k per year for COBRA, no deductible, for one person.

[Aerides]

We paid about 12k per year for the premiums on COBRA for 2 ppl, as we wouldn't get a subsidy for that year. We didn't take dental as it was something like $250 per month so that was silly. Our dentist offers a discount annual plan so we joined that.

But the factors in the choice were not just premium cost:
Staying with existing docs and providers helps - less change to absorb right away
Deductible lower than ACA plans
Stuff like that

[Dash man]

We paid about $17k/yr for our Cobra. Now we’re paying about $29k/yr for my MegaCorp retiree health plan. ACA subsidies are not an option for us. Three years until Medicare.

[OHjosh]

When I left my last job two years ago and looked into healthcare.gov, the algorithm at that time asked if I was eligible for COBRA. If yes, you could not go on ACA. So I think the question is, do you wan to pay for that freedom?

[VanWinkle]

Quote:

Originally Posted by OHjosh When I left my last job two years ago and looked into healthcare.gov, the algorithm at that time asked if I was eligible for COBRA. If yes, you could not go on ACA. So I think the question is, do you wan to pay for that freedom?

Being on cobra does not preclude use of the ACA. Leaving cobra is actually one of the "special enrollment" situations.

[gauss]

IMHO COBRA is a bit of an antiquated concept. With the guarantee-issue, community rated premiums, and possible subsidies all associated with ACA Marketplace policies, the relative value of COBRA plans has diminished.

BTW, I think employers can charge you up to 102% of their actual cost for the premiums in COBRA.

-gauss

[brucethebroker]

Quote:

Originally Posted by gauss IMHO COBRA is a bit of an antiquated concept. With the guarantee-issue, community rated premiums, and possible subsidies all associated with ACA Marketplace policies, the relative value of COBRA plans has diminished. -gauss

We went Cobra route 5-6 yrs ago after leaving big Corp.-a little timid and ACA was still the new kid in town. We changed to ACA in 3 months after much research and getting comfortable with the plans offered. Cobra $1200 a month dropped by about 65% when we changed to ACA-had a higher deductible with ACA but did not really use it. Looking back, we needlessly threw away about $2400 bucks on Cobra.

[VanWinkle]

Quote:

Originally Posted by gauss IMHO COBRA is a bit of an antiquated concept. With the guarantee-issue, community rated premiums, and possible subsidies all associated with ACA Marketplace policies, the relative value of COBRA plans has diminished. BTW, I think employers can charge you up to 102% of their actual cost for the premiums in COBRA. -gauss

102% is correct for the first 18 months, and up to 106% in states that require additional coverage(30-36 months) from cobra as I remember.

[camfused]

Like mentioned before, grab $60k * number of years needed, and stick in a money market. Live on that until you can do medicare, and you can do ACA during that time. This is my plan for ages 62-65.

[VanWinkle]

Quote:

Originally Posted by camfused Like mentioned before, grab $60k * number of years needed, and stick in a money market. Live on that until you can do medicare, and you can do ACA during that time. This is my plan for ages 62-65.

You can pull 28,000 from IRA and 30,000 from Money market taxable fund and get maximum subsidies and cost sharing. 3 years X 30,000 = 90,000 taxable account vs 3 x 60,000= 180,000(more difficult to save) Do not take SS early and you can substitute a pension for the 28000 IRA draw.

[Floridatennisplayer]

Hum, love the responses. Lots to think about. Do I just declare very low income, pay my expenses for a year from our checking account and get a lower ACA cost? Or ease some of the (mental and financial burden) of depleting our savings by taking SS in March at age 64? I would be able to keep income to around 45k and still qualify for discounts.

Also, my employer has all of a sudden decided they don’t like me anymore. Area Director just asked me if I was firm on my March retirement date.....would I consider moving it up! Would I consider working part time until March! Ugh. Told them no. Can’t wait to see what they try to pull next.

[bingybear]

Quote:

Originally Posted by Floridatennisplayer Do I just declare very low income, pay my expenses for a year from our checking account and get a lower ACA cost? Or ease some of the (mental and financial burden) of depleting our savings by taking SS in March at age 64? I would be able to keep income to around 45k and still qualify for discounts.

You make a reasonable estimate of income. If that is honestly low then that is what it is. A 45k MAGI will leave you subsidy land for 2 adults.

I'm a little surprised you gave what... 6 months of notice? Were you a key person or contractually obligated to give that much notice?

[Floridatennisplayer]

Quote:

Originally Posted by bingybear You make a reasonable estimate of income. If that is honestly low then that is what it is. A 45k MAGI will leave you subsidy land for 2 adults. I'm a little surprised you gave what... 6 months of notice? Were you a key person or contractually obligated to give that much notice?

Well, I was tipped off by a friend at the home office that any rep not at 80% to quota would be put on a performance plan October 1st and relieved October 31st. So I beat them to the punch and put in my retirement notification. Interesting note, at our meeting last week, the people under 80% were called into a room and told they need to turn things around immediately.

I was not called into the room. No one said a word to me, no one mentioned my notification. It was only addressed two days after the meeting. So my retirement notification seemed to block their idea. Attorney told me they would be out of their mind to try and terminate a 63 year old employee with a great track record who gave his retirement notification. It’s a chess match. Waiting for their next move.

[bingybear]

Quote:

Originally Posted by Floridatennisplayer It’s a chess match. Waiting for their next move.

They may have already made the next move by asking if your date was firm. Maybe they were thinking of leaving with parting gifts. I don't know how your employer works. But some employer's I've had, if they had to layoff someone and someone was going to leave anyway... it solved the problem. And the person leaving got parting gifts (severance)

This may or may not be true in your case.