COBRA vs Start Retiree Health Insurance

[oliverdickens]

Ok, this one might seem as a no brainer and people might say, why are you wasting time asking, but thought I would ask to see if I am missing anything in my thinking.

I am refering to an option that I will face in a little over a year whereby I will have the choice to take COBRA from ex employer( I was bought out and COBRA starts in April 0, or begin HI thru a retiree option I have with previous employer I worked for 21 years prior to that.

Why the question.

COBRA option, which everyone knows only lasts 18 months, will cost around 650 for DW and myself, has a 400 deductable, covers annual exams 100%, covers Rx, and pays 100% for most diagnostic testing. My wife hit the deductable this year plus another $400, I only hit maybe $100 out of pocket for the year. I am 54, DW 57.

The retiree option is not that great in comparison but will cost less per month. Cost will be around $500 per month, comes with a $2000 deductable, annual exams are not paid for, Rx not covered, so our costs will go up if we have to use it based on deductable and will have Rx to cover for DW.

Logic to me says go with the retiree option because:

COBRA will last only 18 months anyway
Saving $150 per month or $1800 per year or $2700 for the 18 months, would cover some of typical costs should we have the same health as past year
Unless we run into major issues, should save money during this period based on past history, but not that much

Am I missing anything on this logic? Just wanted to check in on anyone that might have had similar circumstances

Thanks

[mykidslovedogs]

I would never take a policy that has no coverage for Rx....Does the policy at least apply the Rx costs to the deductible and then cover Rx after deductible is met? A lot of people confuse deductible expenses with expenses that are not covered. If something is not covered, then it won't even reduce the calendar year deductible.

[oliverdickens]

Well here is the deal.

With the retiree insurance it is guaranteed as any group insurance. No BS from other insurance companies that will not cover you if you have had a hang nail, or not paying the bills when you have an issue. We have all heard the stories.

Unfortunately, to get Rx coverage, one has to go to the next level and pay another $500 per month. One can buy alot of Rx for $6000 per year. What Rx you do purchase go against the deductable

I know it is not the best insurance, and might look at other options, but just don't have much faith.

Thanks for your response

[astroboy]

Originally Posted by oliverdickens

With the retiree insurance it is guaranteed as any group insurance. No BS from other insurance companies that will not cover you if you have had a han nail, or not paying the bills when you have an issue. We have all heard the stories.

I was looking at the same dilemma. Because I know chances are nil of private insruance, it seems either choose COBRA (36 mos here in CA) and be HIPAA eligible for state high-risk pool or take the guaranteed coverage of employer's conversion policy. Costs penciled out to about the same with premiums and deductible differences, so are planning to take the conversion. Just seems less hassle and the peace of mind counts for alot. That's the plan anyway - we'll see what happens when really do ER.

[mykidslovedogs]

Originally Posted by oliverdickens

Well here is the deal.

With the retiree insurance it is guaranteed as any group insurance. No BS from other insurance companies that will not cover you if you have had a hang nail, or not paying the bills when you have an issue. We have all heard the stories.

Unfortunately, to get Rx coverage, one has to go to the next level and pay another $500 per month. One can buy alot of Rx for $6000 per year. What Rx you do purchase go against the deductable

I know it is not the best insurance, and might look at other options, but just don't have much faith.

Thanks for your response

I guess I never answered this one. Sorry I missed your post. Most HSA Compatible plan designs will apply the cost of your Rx to your deductible. So, you can get premium savings AND a cap on out of pocket RX costs/medical costs at the same time, with an HSA.

[Brat]

The policy without drug coverage, what happens if you need chemo?

[mykidslovedogs]

Originally Posted by Brat

The policy without drug coverage, what happens if you need chemo?

Exactly my point! I would never sell a policy without drug coverage. At least purchase a policy with coverage after deductible vs. no Rx coverage at all.

[FIRE'd@51]

Originally Posted by Brat

The policy without drug coverage, what happens if you need chemo?

Isn't chemo covered under the Major Medical part of the policy as outpatient therapy?

[mykidslovedogs]

Originally Posted by FIRE'd@51

Isn't chemo covered under the Major Medical part of the policy as outpatient therapy?

Possibly, but I understand that there are some injectable drugs, such as interferons, that are considered as Rx benefit. There are also some very expensive injectables for Pituitary gland disorders, MS, and Rheumatoid Arthritis that fall under the Rx benefit.