COBRA or Obamacare?

[Fedup]

I would take COBRA if this were my situation.

[Cat-tirement]

I had to make this choice last year. When I retired we switched to DW's insurance. Her employer and her benefits were on a fiscal year beginning July 1. As we planned her retirement for last July, I figured we would do COBRA on her insurance until the end of the year then switch to ACA for this year (to avoid partial year deductibles in an ACA plan). Fortunate timing - her employer decided to change the fiscal year for benefits to calendar year, making a one time extension of the benefit period to 18 months. So we are staying on COBRA until the end of this year, then will have to switch to ACA (or something else) for next year. Medicare is years away.

Cost wise for us, the COBRA premiums were similar or just barely higher than available ACA plan premiums, but the deductibles, copays, and out of pocket max were much lower with COBRA. Plus we moved cross country immediately after she stopped working, so COBRA was also just a lot easier.

[MBSC]

I assume you are satisfied with the employer plan and do not qualify for premium subsidies. If so, I would initially select COBRA since I do not yet know which insurers will offer individual plans in my area for 2018 or what their 2018 provider network looks like. Then, if a 2018 exchange plan had a provider network and benefits that were acceptable to me, I would switch during the annual open enrollment.

COBRA is community-rated while individual market plans in WA are attained-age rated (increases each year for age), so the premium difference will not remain constant.

[ShokWaveRider]

I would go ACA it has been GREAT for us.

[nun]

I looked at continuing ex-employer insurance or buying ACA a few years ago. I was inclined towards the employer insurance just because it was less paperwork as my insurance would not change, but I filled out an ACA application to see what I could get. It turned out that my low income meant that I didn't qualify for ACA and I was put on Medicaid where I got an option of insurance with essentially no premium or a subsidy for my ex- employer's insurance that left me with just $20/month to pay.........so I stuck with the employer's insurance. Right now I'd probably go with COBRA as the other options are full of uncertainty.

[karen1972]

Like all things is just about comparing apples and apples... and not clear you have provided enough information for anyone here to actually know which is better for you.

Do you have an HSA?
Do you have an FSA?
Does your COBRA include those?
Does your exchange offer any of those?
What is the Co-pays?
What is the Medical Deductible?
What is the Drug Deductible?
What is the Hospital/ER Co-pay?
What is your likely yearly procedure/drugs/etc?
What doctors/hospitals do you consider a "must have"
Would you be eligible for subsidies but not fall into Medicare?
Are your meds covered at the same Tier level?

Only then can you decide which is better.

When I quit and we lost my insurance we went on ACA because my COBRA premiums were crazy and didn't cover me in my new state.

When he quit and he lost his insurance he kept COBRA because not his monthly script was covered at a $30 co-pay under his cobra plan and was a Tier 4 or $180/month on the BCBS ACA plan... that $150 difference alone made it a no brainer, plus he had his FSA and lower deductible.

[big-papa]

About to be faced with the same issue after the end of June (unless I find another job).

My thought process:
- Here in Central TX, the ACA plans premiums are within spitting distance of my Cobra premium and the coverage is nowhere near as good. And because I will have earned quite a bit the first half of the year, no subsidy. Likewise for the cost of ACA compliant plans that aren't on the exchange.

- My daughter has a medication that costs us a $50 copayment per month with my current insurance/Cobra but is $325 per month otherwise since it won't be covered by any ACA Plan available around here unless the very high deductable is first met.

- Unemployment insurance will just about cover my Cobra cost and would would take me to the end of the year anyway, which is when open enrollment would start.

So unless I'm re-employed before then, I'm going the Cobra route at least until the end of the year.

[Starsky]

COBRA and the ACA are very different and your choice should depend greatly on - among other things - the policy you have now, where you live and how much income you have.

I chose to stay on my wife's COBRA for 18 months because it was an excellent insurance plan with better coverage than the ACA alternatives.

After 18 months I switched to the ACA [Covered California] with a large HMO. I qualified for an ACA subsidy given our low retirement income that cut my premium in half. The lower monthly cost is offset by the higher co-pays and prescription costs; and it does sometimes feel like insurers will provide more generous care to non-ACA policyholders, but my care has been excellent. I have not had any more problems under the ACA than with our previous insurer.

It is interesting how the ACA can have an impact on work and investment decisions since generating additional income lowers the monthly subsidy. We chose to defer a Roth conversion for this reason. It doesn't cost me to wait.

[T-Minus]

I have stopped working, but am still on the payroll 'till mid July. I structured this in order to get 18 months of COBRA coverage...all the way up to the end of 2018. Hopefully, there will be something in place for 2019.

[eastnortheast]

Interesting discussion. If/when I retire later this year, I am going to be facing the same dilemma. Looking to probably remain on COBRA initially. Would like to have another 6-18 months to see how any changes to the ACA play out. May be worth it to have a higher income in the COBRA years to minimize income when switching to the ACA to obtain subsidies (if they will still in fact exist).

[sakowitzm]

I'm with (what seems like) the majority to stick with COBRA. It's "the devil you know", and having had two immediate family members with cancer, believe me when I tell you the devil can be quite wicked.

[Aerides]

I plan to COBRA for at least the remainder of the year (since deductibles don't transfer) and probably the full 18 months, switching to a market plan for 2019.

It's more expensive for premiums, but less for deductibles, with excellent coverage. I don't see other plans comparable for the same price. Added bonus that I don't have to change anything or shop around for doctors during the likely churn in the market we're going to have for at least that long...

[jollystomper]

I am also in the same situation. I will take COBRA through 2018. We are not eligible for subsidies so the cost difference is not much. Knowing that we can use the exact same doctors as we do today is worth it. It will give us more time to look at whatever shakes out of the ACA/AHCA.

[T-Minus]

Quote:

Originally Posted by Aerides ...It's more expensive for premiums, but less for deductibles, with excellent coverage...

For DW and I, COBRA is cheaper than the cheapest bronze-level ACA plan ($1,024.96/mo. vs. $1,182.84/mo.), with significantly lower deductibles and much better coverage. These are actual numbers - checked and verified about a week ago. And no, we do not qualify for any subsidies...

[NameRedacted]

I'm amazed at all the people that found Cobra better than the ACA.

For my situation retiring in early March of this year the ACA was a much better deal. Cobra would have cost around $1200 a month.

A bronze plan for me only costs $320 - excluding subsidies which I may just qualify for this year and definitely will qualify for next year - if it's still around. I haven't ever needed much healthcare so I'm gambling that bronze coverage will be fine. Even the platinum plan was around $500 or so. The deductibles and copays for the bronze plan are higher but since I haven't used it much that probably won't matter.

My girlfriend, who has type I diabetes, was able to sign up for the NY essentials plan which is an amazing deal. $20/month and no deductible. She has 7 prescriptions and the monthly cost for those is about $70-80 lower. No deductible will save us about $2000/year compared to Cobra. For an extra $26/month she was able to get dental and vision too.

So we were able to save around $1075/month compared to Cobra and if the ACA is around next year even more with the subsidies.

[jollystomper]

Quote:

Originally Posted by NameRedacted I'm amazed at all the people that found Cobra better than the ACA..

Perhaps a lot depends on how many you individuals need to cover, as well as the COBRA policy of your employer. My Megacorp offers reasonable COBRA rates (as compared to the employee rate) for the 3 people I need to cover, perhaps because they self-insure.

[Carpediem]

It also depends which plans are available in a person's state. For us, we have one choice and it's far from affordable.

[2017ish]

Quote:

Originally Posted by NameRedacted I'm amazed at all the people that found Cobra better than the ACA. For my situation retiring in early March of this year the ACA was a much better deal. Cobra would have cost around $1200 a month. ...

In addition to the factors pointed out by jollystomper, [and as stated by Carpediem while I was typing] it depends upon where you live. In our situation, if unsubsidized ACA were less than 50% the cost of the $2000+ monthly COBRA premium for the last five months of this year, I would not forego DW's employer plan.

Won't know until later in the year if any ACA-compliant plans will be offered here for 2018--much less what providers would actually be covered and at what cost. (In future, will be able to just move state of residence if needed, but travel plans would make that inconvenient this year.)

Keeping options open is key and COBRA enables that for us.

[ziggy29]

I would agree with THIS set of numbers I would stick with COBRA. Mostly because you are likely getting a much wider network of providers (I assume this is roughly an apples to apples where deductibles and OOP maximums are concerned?)

But also at this late date while it would seem **very** unlikely that the ACA will be massively changed by legislation in time to take effect in 2018 (IMO), if something does happen and you have declined COBRA, there is no going back if you opt for the Marketplace. The other unknown is the quality of 2018 plans -- each year, in many states, the premiums are going up very quickly (especially unsubsidized), PPOs are being taken away and replaced with HMOs, fewer doctors are taking ACA plans and the choices on the Marketplace are shrinking. Where I live (and many other places), there is only one insurer playing the Marketplace game and they only offer HMO plans.

[Aerides]

I could have gotten a bronze plan for about half what Cobra will cost - purely on the basic premiums. I'm mainly staying COBRA to avoid the unknown of changing now, then having to pick another plan for 2018 (because they always seem to change, and because the cost gap may close further).

But I'd have to drop all my doctors, no longer get the Cleveland Clinic in my plan, and have a much higher deductible for that price. Copays and referrals for everything, stuff like that higher too. So a PITA cost.

Even most of the Silver plans weren't close in terms of coverage and benefits. There were some higher end plans that were close, but still over $1k per month for me and DH. But yes every state is different.