Author Topic: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA  (Read 4380 times)

The Pigeon

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I'm eligible to stay on COBRA insurance until June 2018. I was going to sign up for the ACA during this open enrollment, but with the uncertain future of the ACA, I've been hesitant to do so. As the enrollment period is closing, it's time to fish or cut bait.

COBRA costs about $300/month more than I'd pay if I signed up for the ACA. However, I feel more confident that the COBRA insurance will "be there" -- I don't foresee any way that my former employer would NOT be providing coverage for their employees (and therefore us COBRAs).

I thought I'd ask here, if there are any other FIRE-ees that are in a similar situation between the COBRA and the unpredictable potential changes and/or elimination of all/part of the ACA.

I feel safer sticking with COBRA through the upcoming year, for its seeming certainty, but would like to entertain your opinions as to whether that strategy is off-base.

Thank you!
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The Pigeon

Spork

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #1 on: January 13, 2017, 04:33:36 PM »

What are the restrictions on the COBRA?  If you leave it and get ACA insurance, can you go back?  Or is it gone forever?  Is there a time limit for how long you can stay on COBRA or will it be available indefinitely.

Melf

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #2 on: January 13, 2017, 04:59:47 PM »
I believe to accept COBRA coverage, I had to sign up within 90 days of my last day at work. To keep it, my payments have to stay current for however many of the 18 months I'm eligible that I want to stay covered.  I think once you let it lapse then you're done.  I think I'm eligible thru May 2018.

I had the same decision to make recently as far as COBRA vs ACA.  I opted to go with COBRA for 2017 due to uncertainty about ACA going forward and also due to the hassle of having to project my income for 2017 for eligibility/subsidies.  I figured I might end up having to pay full price out of pocket for 2017 and get the subsidy when filing taxes for 2017.  Once again, the uncertainties related to even the short-term future of the ACA made me choose to go with the known cost/coverage through COBRA.

Mrs. Pomodoro

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #3 on: January 13, 2017, 05:22:37 PM »
I plan to stop working in May and we decided to choose COBRA for the remainder of 2017. We might not get much ACA subsidies depending on when I stop working and how well our side gigs will do. We plan to re-evaluate comes 2018 when we have better ideas of our post-FIRE cash flow and what's left of ACA.

Since we're from the same area, you might want to look into what insurance your current medical providers take (unless it's Kaiser, in which case there might not be a big difference?) Our pediatrician, ob/gyn and psychologist take different flavors of different plans to the point that no matter which plan we choose we will be paying someone out of pocket for just the preventative care. Staying on COBRA is definitely less complicated and more dependable for our family of 3.

The Pigeon

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #4 on: January 13, 2017, 05:48:33 PM »

What are the restrictions on the COBRA?  If you leave it and get ACA insurance, can you go back?  Or is it gone forever?  Is there a time limit for how long you can stay on COBRA or will it be available indefinitely.

There is a limit to how long you can be on COBRA. And once you leave it, you can not go back to it. For my individual situation, I can keep my COBRA until June 2018, so I can ride out this uncertain year on COBRA with the assurance that I will be covered, but that comes at a cost (about $3500 over the course of the year) in comparison to the ACA.

I'm willing to (and leaning toward) paying the extra for peace of mind and solid coverage with COBRA rather than taking a chance on my own with the ACA, whose very existence is questionable, and could go any which way. 

I'm just wondering if I'm playing my cards right---I think I am---and this community has a great group of brains to query about the matter. (You guys rock!)

I admit, I'm very apprehensive about the future of our health care options, and how that can affect those of us who are FIREd. I'd hate to think I'd have to endure full-time work again just so I could acquire decent health insurance.

-The Pigeon
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Mrs. Pomodoro

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #5 on: January 13, 2017, 06:32:06 PM »
I admit, I'm very apprehensive about the future of our health care options, and how that can affect those of us who are FIREd. I'd hate to think I'd have to endure full-time work again just so I could acquire decent health insurance.

Food for thoughts: one of my coworkers used to work at Starbucks 20 hours a week, just enough to qualify him for health insurance. (He was a freelance photographer when he first moved to this area years ago.) He said the only drawback was he had to go through the required corporate training; otherwise it's a fun job. ;)

Metric Mouse

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #6 on: January 13, 2017, 11:13:58 PM »
I admit, I'm very apprehensive about the future of our health care options, and how that can affect those of us who are FIREd. I'd hate to think I'd have to endure full-time work again just so I could acquire decent health insurance.

Food for thoughts: one of my coworkers used to work at Starbucks 20 hours a week, just enough to qualify him for health insurance. (He was a freelance photographer when he first moved to this area years ago.) He said the only drawback was he had to go through the required corporate training; otherwise it's a fun job. ;)

Starbucks does very well providing benefits to their pt. staff. It's a passion of the founder, I believe.

Paul der Krake

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #7 on: January 14, 2017, 12:20:29 AM »
Unless you are currently undergoing an extensive treatment plan where continuity is paramount, I think you are being overly cautious.

You didn't mention subsidies, is the price of your quoted ACA policy the full price? If so, just go with the ACA policy, they can't claw back subsidies that were never given to you in the first place.

In all likelihood your ACA plan will still exist through 2017, so really COBRA only buys you 6 months of peace of mind. $3500 is a lot of money, and you have a lot of time on your hands to figure something out should things turn for the worse.

Once the repeal comes, you can always purchase one of the new plans that insurers are probably furiously working on as we speak. They should be cheaper than current ACA plans.

ltt

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #8 on: January 14, 2017, 11:47:41 AM »
It's my understanding, maybe I'm wrong, that ACA is for more catastrophic-like events.  Therefore, I would keep the COBRA and pay the additional.  But we're a family of 6.   

Cpa Cat

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #9 on: January 14, 2017, 12:22:07 PM »
Think of it this way: If you go with ACA you can save $3,600 extra dollars over the next 12 months.

Do you have some kind of major pre-existing condition that you're afraid might exclude you from insurance if the rules change? If not, insurance will still exist in the post-ACA age. It may even be cheaper. Even if it gets more expensive, you'll have your extra $3,600 to pay for any additional premiums.

What if Congress passes a bill that totally jerks the ACA rug out from under us in March? Well, good news for you - open enrollment only exists due to ACA (to prevent people from only signing up for insurance when they get sick). With that gone, you'd be able to shop for a new plan with no restrictions. But probably whatever changes occur will not affect this year's plans.

It's my understanding, maybe I'm wrong, that ACA is for more catastrophic-like events. 

This is factually incorrect. A wide variety of plans exist on the ACA Marketplace and they are subject to the same basic rules as employer-provided plans. In fact, you generally have a greater variety of plans and price points available when not bound by your employer's choices.

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #10 on: January 14, 2017, 12:50:43 PM »
It's my understanding, maybe I'm wrong, that ACA is for more catastrophic-like events. 

This is factually incorrect. A wide variety of plans exist on the ACA Marketplace and they are subject to the same basic rules as employer-provided plans. In fact, you generally have a greater variety of plans and price points available when not bound by your employer's choices.

Yeah, I'm not sure where Itt got that from.

I have applied for a Silver ACA plan from Anthem Blue Cross. With the premium subsidy, my cost will be $185 per month (and I'm in my late 50's, so it would be even cheaper for most people). The deductible is $200. With cost sharing my maximum out of pocket for the year is $850.

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #11 on: January 14, 2017, 01:12:33 PM »
I'm eligible to stay on COBRA insurance until June 2018. I was going to sign up for the ACA during this open enrollment, but with the uncertain future of the ACA, I've been hesitant to do so. As the enrollment period is closing, it's time to fish or cut bait.

COBRA costs about $300/month more than I'd pay if I signed up for the ACA. However, I feel more confident that the COBRA insurance will "be there" -- I don't foresee any way that my former employer would NOT be providing coverage for their employees (and therefore us COBRAs).

I thought I'd ask here, if there are any other FIRE-ees that are in a similar situation between the COBRA and the unpredictable potential changes and/or elimination of all/part of the ACA.

I feel safer sticking with COBRA through the upcoming year, for its seeming certainty, but would like to entertain your opinions as to whether that strategy is off-base.

Thank you!
:-)
The Pigeon

I think you'd probably be fine and spend less money by picking a good ACA plan. But until 18 months from now, when you can look back and see exactly what Trump / Congress did, and factor in your actual medical claims, no one could say for sure. 

My own opinion is that Trump / Congress will be very unlikely to pull the rug out from under people in 2017. No political stomach for that with mid term elections coming in 2018.

So the real uncertainty for you would be the first 6 months of 2018. Depending on your current health, it probably isn't worth paying more for COBRA.

On the other hand, if you currently have an expensive and chronic health condition, it might not be worth the uncertainty of switching to a different carrier and policy.

I happen to be in the same boat as you. I FIRE'd a week ago. I could get COBRA coverage on my very nice work policy for $512 per month. But unlike you, I am in a low COLA and so my income is low and qualifies for subsidies and cost sharing. My monthly premium on a very nice ACA Silver policy is $185.

So for me, the math was easy. I'll save $3,924 on premiums in 2017 by going with a ACA plan, even though what will happen in 2018 is unsettled.

FB2020

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #12 on: January 14, 2017, 03:04:58 PM »
Agree with others.
ACA will not change over night. They will likely continue existing folks in some way or form thru this year. Maybe they will change some terms etc.

If you're generally healthy you can choose to be with ACA and pay less. Next year - cross the bridge when we get to it.

FrugalZony

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #13 on: January 14, 2017, 09:00:14 PM »
I went on COBRA for the last quarter of 2016 after leaving my job.
We then signed up for a basic ACA plan for 2017
I could have gone on COBRA through March 2018, but I figured the ACA would still be there in 2017 at least
and then we'd have to figure out something for 2018 one way or another....

We have an option to sign up for travel insurance though, which we did (we are eligible because we have
an address in the country the travel insurance is issued in and we can renew every two years. We also
have to be in that country once every two years, so this won't work for most people).

If ACA goes away completely we are considering to use the travel insurance only for catastrophic events and
either self insure or supplement with a very basic US insurance.

soccerluvof4

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #14 on: January 15, 2017, 05:38:20 AM »
When I left my company for a family of 6 for Dental, Health and Vision with low deductible, keeping our doctor and very low prescription costs my cobra was $1152 a month. For ACA everything added up to be more than double and actually almost 2.5x's as much. So for us we stayed on Cobra for 16 of the eligible months.

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #15 on: January 15, 2017, 09:31:21 AM »
Given those timelines I'd probably stick with the ACA. It's hard to imagine any repeal affecting plans people are already on for 2017, so we're really just talking about those first six months of 2018. You're going to have to brave the post-ACA insurance landscape for the second half of 2018 anyway, so you might as well get a head start unless you have some sort of pre-existing condition that you just know will make you uninsurable at that time.

radram

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #16 on: January 15, 2017, 09:57:30 AM »
I'm eligible to stay on COBRA insurance until June 2018. I was going to sign up for the ACA during this open enrollment, but with the uncertain future of the ACA, I've been hesitant to do so. As the enrollment period is closing, it's time to fish or cut bait.

COBRA costs about $300/month more than I'd pay if I signed up for the ACA. However, I feel more confident that the COBRA insurance will "be there" -- I don't foresee any way that my former employer would NOT be providing coverage for their employees (and therefore us COBRAs).

I thought I'd ask here, if there are any other FIRE-ees that are in a similar situation between the COBRA and the unpredictable potential changes and/or elimination of all/part of the ACA.

I feel safer sticking with COBRA through the upcoming year, for its seeming certainty, but would like to entertain your opinions as to whether that strategy is off-base.

Thank you!
:-)
The Pigeon

I would hands down choose the lower cost option with the greatest expected benefit for YOU. Based on subsidies, that may be a good silver plan. That is what it was for me.

EVERYTHING is fair game for change. The COBRA option is no more "safe" than the ACA option. All could be removed in the coming year(s). It may be tossed out as a bargaining chip for whatever the new idea is. 

ltt

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #17 on: January 16, 2017, 05:39:04 PM »
When I left my company for a family of 6 for Dental, Health and Vision with low deductible, keeping our doctor and very low prescription costs my cobra was $1152 a month. For ACA everything added up to be more than double and actually almost 2.5x's as much. So for us we stayed on Cobra for 16 of the eligible months.

Thank you.  This is what people aren't saying.  For middle-income families, the premiums are high, as well as the deductibles.  For the heck of it, I went and priced our family of 6 out on the marketplace several months ago.  (We currently have insurance through my husband's employer.)  Between premiums and deductibles, it was not even remotely affordable.  So, I'm curious what people pay between premiums and deductibles and what types of services the ACA is covering?  I think the low cost and referring the OP to go the ACA route, well, I'd be concerned.  Does the OP get to keep their same doctor?


Miss Piggy

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #18 on: January 16, 2017, 06:25:56 PM »
Following, as we're in the same boat now.

soccerluvof4

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #19 on: January 17, 2017, 10:19:55 AM »
When I left my company for a family of 6 for Dental, Health and Vision with low deductible, keeping our doctor and very low prescription costs my cobra was $1152 a month. For ACA everything added up to be more than double and actually almost 2.5x's as much. So for us we stayed on Cobra for 16 of the eligible months.

Thank you.  This is what people aren't saying.  For middle-income families, the premiums are high, as well as the deductibles.  For the heck of it, I went and priced our family of 6 out on the marketplace several months ago.  (We currently have insurance through my husband's employer.)  Between premiums and deductibles, it was not even remotely affordable.  So, I'm curious what people pay between premiums and deductibles and what types of services the ACA is covering?  I think the low cost and referring the OP to go the ACA route, well, I'd be concerned.  Does the OP get to keep their same doctor?




I dont think its a one size fits all. ACA for us made no sense in anyway and I wanted it to. I would not of been able to keep my doctor. The premium was ridiculously high and the deductibles were even higher. Think you just have to look at it case by case.

Spork

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #20 on: January 17, 2017, 11:22:02 AM »
When I left my company for a family of 6 for Dental, Health and Vision with low deductible, keeping our doctor and very low prescription costs my cobra was $1152 a month. For ACA everything added up to be more than double and actually almost 2.5x's as much. So for us we stayed on Cobra for 16 of the eligible months.

Thank you.  This is what people aren't saying.  For middle-income families, the premiums are high, as well as the deductibles.  For the heck of it, I went and priced our family of 6 out on the marketplace several months ago.  (We currently have insurance through my husband's employer.)  Between premiums and deductibles, it was not even remotely affordable.  So, I'm curious what people pay between premiums and deductibles and what types of services the ACA is covering?  I think the low cost and referring the OP to go the ACA route, well, I'd be concerned.  Does the OP get to keep their same doctor?




I dont think its a one size fits all. ACA for us made no sense in anyway and I wanted it to. I would not of been able to keep my doctor. The premium was ridiculously high and the deductibles were even higher. Think you just have to look at it case by case.

Caveat: I know stuff varies by zip code... so what I'm about to say is quite possibly false for some.

Where ACA "works" for retiree's is where you can actually engineer your income *AND* you are a relatively healthy person. If you can engineer it below the 400% of FPL for your family AND you are healthy enough that co-pays become unimportant and you can get a bronze plan... it starts paying off.  If you can get your expenses down further and lower your income more... it pays off more.

But, yes, ACA raised the baseline cost of insurance.  That's how it was built.  My insurance before ACA existed cost approximately what it did after ACA (with subsidies applied). 

The Pigeon

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Re: Stay on [expensive] Cobra -or- sign up for [questionable-future] ACA
« Reply #21 on: January 25, 2017, 09:40:41 PM »
This is a sticky situation, with such uncertainty ahead. It does seem likely that for 2017, the new administration will not be able to completely "pull the rug out" so to speak, from the millions on the ACA.

I can not engineer my income enough to ensure I would qualify for the subsidy, although I *believe* I would based on last year's tax returns. My income is generated from investments, so it fluctuates. (For the reason of having a predictable, quantifiable yearly income, having a job was handy All this guesswork is a PITA).

I thank you all for your input, and insight. Uncertainty has led me to choose to keep with COBRA for the year, despite the extra expense. And, of course, if I end up *not* qualifying for the subsidy, it's a wash anyway.

I'm super nervous about the future of health care in the US... It sure isn't like what the earlier generation had. My father's career company provided both my parents with high-quality low-cost lifetime medical insurance for the entirety of their lives. (And my father lived 30 years after he retired!). Oh, yeah, AND a generous pension.

Nervously and grimly,

The Pigeon