COBRA or ACA for 2020?

[trirod]

So my wife and I need to decide whether to continue with COBRA for 2020 or go with an ACA plan. It seems like the ACA plan should be much cheaper (with subsidies), but I'm nervous about any "gotchas" or other unknowns so I'm looking for the voice of experience on this forum.

Our situation is that my wife retired in June and is currently on her employer's COBRA (our income is too high in 2019 to qualify for subsidies so ACA was not a consideration for 2019). I semi-retired 12/31/18 but am still covered by my employer's insurance through the end of this year. Our main options for 2020 are for us to both go with COBRA, at a monthly premium cost of around $1,000 per month, but with pretty good (and known) coverage through Blue Cross Blue Shield. Or to go to the exchanges and (after expected subsidies) get a BCBS HMO bronze HSA plan for around $200 per month (but max out of pocket of $6,850 each). Or we could go with a PPO for around $435 per month.

We are both in generally good health (touch wood!) but it seems like even if we both hit the max out of pocket in 2020 (which I really hope is unlikely!) then it still will be cheaper to be on the exchange than on COBRA.

So some of my questions are:

- Will I notice a big difference moving from a PPO to an HMO? It seems my primary care doctor and hospital network here is in the BCBS HMO network. Just wondering if there could be issues with specialists not being covered? Anybody have personal experience of that?

- Is there any fundamental difference between BCBS plans on the exchange vs. the BCBS plan I currently have with my employer? I am assuming they should have the same networks, but maybe that is naive?

- Any other differences between COBRA and ACA coverage that I am not thinking of (other than premium costs?)

Thanks for any help with this very confusing issue (I've lived in the US for nearly 25 years but am originally from the UK where, whatever its other shortcomings, the health care system is way simpler to understand!).

 

[teejayevans]

I think you have to go cobra, you’re not eligible for aca unless you have no other insurance option.

 

[Spock]

I think you have to go cobra, you’re not eligible for aca unless you have no other insurance option.

Not correct. You can move from COBRA to ACA on any "qualifying event". My 18 month COBRA had a massive rate increase at the 12 month mark going from the employee rate to the employer cost+admin fee rate. This allowed a special enrollment into ACA despite having 6 months of COBRA left.

 

[trirod]

From my reading I can move off COBRA to an ACA plan (and still get subsidies) for any reason as long as I do it at open enrollment time - but this is very confusing so I am happy to be informed otherwise.

 

[O2Bfree]

I think you have to go cobra, you’re not eligible for aca unless you have no other insurance option.

I don't think that's true. I've taken cobra since September and am eligible for it for another 12 months. But I'm dropping it and going ACA for 2020 because it's much cheaper. I researched this first, for example:

https://www.verywellhealth.com/cobra-obamacare-subsidy-1738953

Can I Enroll in an Individual Market Plan Instead of COBRA?

Yes. You have a limited period of time after the qualifying event (losing your job or getting divorced, for example) to sign up for COBRA. The event that is causing you to lose access to your employer-sponsored plan will also trigger a time-limited special enrollment period on your state's Affordable Care Act health insurance exchange (or for an ACA-compliant plan offered outside the exchange).

The article has more details about enrollment periods, but essentially, you can go ACA even if you qualify for Cobra.

 

[MichaelB]

Not correct. You can move from COBRA to ACA on any "qualifying event". My 18 month COBRA had a massive rate increase at the 12 month mark going from the employee rate to the employer cost+admin fee rate. This allowed a special enrollment into ACA despite having 6 months of COBRA left.

From my reading I can move off COBRA to an ACA plan (and still get subsidies) for any reason as long as I do it at open enrollment time - but this is very confusing so I am happy to be informed otherwise.

Yes to both. You can go from Cobra to ACA based on a qualifying event, and also during ACA open enrollment.

So some of my questions are:

- Will I notice a big difference moving from a PPO to an HMO? It seems my primary care doctor and hospital network here is in the BCBS HMO network. Just wondering if there could be issues with specialists not being covered? Anybody have personal experience of that?

Two big differences between PPO and HMO. With the HMO your primary care physician must approve and authorize in writing each visit to a specialist, lab, hospital, etc. or it's not covered. Also, the HMO network tends to be smaller than the PPO network.

- Is there any fundamental difference between BCBS plans on the exchange vs. the BCBS plan I currently have with my employer? I am assuming they should have the same networks, but maybe that is naive?

There could be big differences. One possibility is in drug coverage. Another is the amount of cost sharing. The third is the size of the network.

- Any other differences between COBRA and ACA coverage that I am not thinking of (other than premium costs?)

Thanks for any help with this very confusing issue (I've lived in the US for nearly 25 years but am originally from the UK where, whatever its other shortcomings, the health care system is way simpler to understand!).

You can't make a blanket statement comparing employer plans with ACA because they are subject to different coverage mandates, and there is no standard for employer plans. Things things to look at are

Cost sharing, which means how much you pay of the total cost of services.
Provider network size for the plans you are comparing. This means which hospitals, labs, physicians, etc, are covered.
Prescription drug coverage.
Emergency room coverage. This is an area of increasing difficulty as insurers look for ways to not pay.

 

[cathy63]

From my reading I can move off COBRA to an ACA plan (and still get subsidies) for any reason as long as I do it at open enrollment time - but this is very confusing so I am happy to be informed otherwise.

Yes, you're correct. This is exactly what I did. Retired in July 2016, took COBRA until the end of that year and switched to an ACA plan during open enrollment, starting on 1/1/2017. I could have continued COBRA through 2017, but chose ACA.

One thing to look out for on the ACA plan vs employer plan is the coverage when traveling within and outside the U.S. What if you're in a neighboring state and have a car accident that sends you to the hospital? What if you come down with something that's not an emergency while traveling but for which you want to see a doctor? What if either of these things happens when you're on vacation in a foreign country? You should learn how each of these cases would be dealt with under your current plan and under the ACA plan you're considering in order to make an informed decision and know what risks you're taking on.

 

[teejayevans]

Every year I sign up, they ask a series of qualifying questions like “are you eligible for insurance through your employer”, seems like cobra fits that description, unless there is a special rule.

 

[O2Bfree]

Every year I sign up, they ask a series of qualifying questions like “are you eligible for insurance through your employer”, seems like cobra fits that description, unless there is a special rule.

I was confused by that too. When applying for ACA last week, I answered yes to this question because I'm on Cobra now and eligible for Cobra through next year. That got me turned down for ACA tax credits, although it looked like I still could have bought ACA insurance at full price. I did some research and found out that eligibility for Cobra is not what they're talking. Eligibility for Cobra does not make you ineligible for ACA coverage and tax credits.

 

[MichaelB]

Every year I sign up, they ask a series of qualifying questions like “are you eligible for insurance through your employer”, seems like cobra fits that description, unless there is a special rule.

Even if you are eligible for Cobra you can still enroll in an ACA marketplace policy. See here for details. https://www.healthcare.gov/unemployed/cobra-coverage/

 

[Sue J]

- Is there any fundamental difference between BCBS plans on the exchange vs. the BCBS plan I currently have with my employer? I am assuming they should have the same networks, but maybe that is naive?

Verify that your providers are included in the ACA plans. In our area some of the plans on the exchange have a much narrower network than an employer plan from the same insurance company. Sometimes the ACA plan will have "Select" in the plan name or some other name that gives you a clue but maybe not.

If you've got providers (doctor, hospital, lab, pharmacy) that are important to you check that they are included in the exchange plans.

 

[PaunchyPirate]

I was confused by that too. When applying for ACA last week, I answered yes to this question because I'm on Cobra now and eligible for Cobra through next year. That got me turned down for ACA tax credits, although it looked like I still could have bought ACA insurance at full price. I did some research and found out that eligibility for Cobra is not what they're talking. Eligibility for Cobra does not make you ineligible for ACA coverage and tax credits.

This also happened to me for my first year of coverage (2019). I was technically eligible for COBRA since I retired at the end of 2018, but I didn't want it since it was going to be 2x more expensive than subsidized ACA. I answered that question the same way you did and it also told me I was not eligible for a subsidy. I immediately called the Healthcare.gov help line and explained my situation and the agent changed my responses so that I was eligible for the subsidy. It's poorly worded in their questions, but you do not have to take COBRA if it's available to you. You can take the ACA route and also get a tax credit subsidy.

 

[PaunchyPirate]

For the original poster, my comments are that you really can only determine the best route based upon your specific details. You need to research each plan and determine whether the services/drugs you know you need are covered to a level you expect. You should also look at other possible situations you might find yourself in this year. Research each plan website and use their tools for determining each of their own intricacies of coverage. 2 BCBS plans may or may not have the same drug formulary, network members, etc. It's unfortunate, but that's the way it is. I have one prescription drug that makes bronze plans that are available to me more expensive than a gold plan that is available to me. It will ultimately probably be a bit of a guess. If you're healthy and not currently on any drugs that make the HMO route seem bad, I'd probably be tempted to roll the dice on the HMO and see if it works for you. You can always change to a better option next year. If the Max out-of-pockets are similar, you're pretty much financially protected in a bad situation.

 

[swakyaby]

I retired end of 2017. For 2018, I decided to enroll in COBRA because I was unsure how difficult it would be to justify my income, and my GI specialist's office told me they were not in-network with any ACA plans. For that decision, I was paying throughout 2018 $1,450/month (for 2) for a high deductible Blue Shield ppo plan with HSA, having a $4,000 deductible per person, and a $11,500 max out-of-pocket per person.

For the 2019 enrollment period, even though I was still eligible for 6 more months of COBRA, I decided to enroll in an ACA Blue Shield high deductible ppo plan with HSA. The HMO would have been lower, but my PCP and my spouse's PCP were not in-network with any HMO. I had some difficulty at first documenting my change in income on the ACA website, but I then requested and received live phone assistance from an ACA enrolled agent. With the agent's assistance, my premiums went from an unsubsidized $2,062/month to $545/month for 2019.

I think that if the OP's PCP and local hospital are both in-network with the HMO that the OP is considering, then it should be fine. The PCP will make referrals to an in-network specialist, if one is deemed necessary by the PCP (gatekeeper!).

 

[cathy63]

Every year I sign up, they ask a series of qualifying questions like “are you eligible for insurance through your employer”, seems like cobra fits that description, unless there is a special rule.

If you're eligible for COBRA, then by definition, the company providing access to it is not your employer. They used to be your employer, but they're not any more. So you should answer that question "no".

 

[jollystomper]

Verify that your providers are included in the ACA plans. In our area some of the plans on the exchange have a much narrower network than an employer plan from the same insurance company. Sometimes the ACA plan will have "Select" in the plan name or some other name that gives you a clue but maybe not.

If you've got providers (doctor, hospital, lab, pharmacy) that are important to you check that they are included in the exchange plans.

+1

Our youngest aged out of our COBRA plan, and when he went to the ACA *none* of our existing doctors he used would take it. He had to search for a while to find providers that would *and* were accepting new patients. So be sure to check this out before you switch.

 

[ziggy29]

Our youngest aged out of our COBRA plan, and when he went to the ACA *none* of our existing doctors he used would take it. He had to search for a while to find providers that would *and* were accepting new patients. So be sure to check this out before you switch.

In particular, if the ACA plan is an HMO -- and in some areas, that is ALL you can get -- absolutely check the in-network provider list, because they may have a pathetic network, and the few that are in network may not be accepting new patients.

AND -- if there is a provider that IS in a weak network AND is accepting new patients -- there may be a reason for it.