Commenter Satby has just been laid off and is looking forward to going on the Exchange for coverage that starts on January 1, 2014.
There is a way to game the system for effectively free coverage via COBRA if nothing goes wrong in December for Satby. The Department of Labor COBRA FAQ has some relevant details to about COBRA and how to create a COBRA option for free as a transitional bridge to Exchange policies going live on Jan. 1, 2014.
Q15:
The initial premium payment must be made within 45 days after the date of the COBRA election by
the qualified beneficiary. Payment generally must cover the period of coverage from the date of COBRA election retroactive to the date of the loss of coverage due to the qualifying event.
Premiums for successive periods of coverage are due on the date stated in the plan with a minimum 30-day grace period for payments. Payment is considered to be made on the date it is sent to the plan. If premiums are not paid by the first day of the period of coverage, the plan has the option to cancel coverage until payment is received and then reinstate coverage retroactively to the beginning of the period of coverage.Q6
Plan participants and beneficiaries generally must be sent an election notice not later than 14 days after the plan administrator receives notice that a qualifying event has occurred. The individual then has 60 days to decide whether to elect COBRA continuation coverage. The person has 45 days after electing coverage to pay the initial premium.
The clock starts no later than Dec. 15 for Satby to elect coverage under COBRA. However the election period runs to at least Feb. 1st and no later than Feb. 15. During that period, Satby can elect coverage effective Dec. 1 as long as the payments come in. If Satby elects COBRA, Satby is ineligible for the Exchanges until the 2014 open enrollment period. The reason to go this route would be to cover any extreme outlier situations such as Satby getting hit by a bus on Dec. 17th. It is a pure adverse selection risk play. If Satby makes it to Dec. 22nd without any major medical expenses in January, the smart play is to get subsidized Exchange insurance. It is a free option so it would be a smart one to take to get de facto coverage for the month of December for free.
The cost is a roughly one week at the end of December where Satby would have already selected Exchange Insurance. If she had been hit by a reindeer on Christmas Eve, she would lock into COBRA for the year or at least be subsidy ineligible even after she signed up for Exchange insurance.
brendancalling
I have received my eligibility and subsidy amount. I do not have employer-provided healthcare, and I live in PA, so I have to use the federal exchange. Not that I qualified for the Medicaid expansion our brain-dead governor chose to to do.
The cheapest silver plan healthcare.gov offers me is about $75-$100 out of reach, eating up way too much of my discretionary income. The cheapest bronze isn’t worth the money paid for it.
This includes the subsidy. I’m looking at competing bills, like during the winter months where heat can cost as much as $400 for January, or when i have to do a repair on my ancient car (when I replaced my alternator a few weeks ago it cost the same as the Silver Plan). I’d like to take a out a loan for a newer used vehicle (at 265,000 miles the Subaru doesn’t have a lot of life left in her) but if I get health insurance, I won’t be able to get past the application process. It definitely means I can’t fly my son down to Philadelphia for his school vacations (he lives 8-10 hours away, and it’s pointless to spend two days of a 4-day weekend driving back and forth).
Any suggestions? And please don’t say “get a second job” or silly stuff like that. I already live really low on the hog as it is.
Richard Mayhew
@brendancalling: Realistically, taking the mandate penalty might be the best choice that only partially sucks
brendancalling
And that leaves me without insurance, as a father, at the age of 43.
I’ll add that the Executive Director of HCAN PA -a personal friend- has admitted to me that the SIlver Plan is way to expensive.
Richard, I gotta say, I am really happy for the people the ACA helps, with pre-existing conditions and all. And I’m glad that the people who could already afford insurance -just barely, in some cases- now save a lot of money.
But the ACA really doesn’t help me at all. And that’s disappointing, because I voted for Obama twice, and argued with a lot of people in favor of the ACA. High deductible insurance I can’t afford, subsidies that are too stingy, and ultimately paying a penalty for something I’d definitely purchase if it was cheaper (or I made more money).
Sigh… this is what slipping through the cracks feels like I guess. At least I’m offered a subsidy: a lot of my 30-something friends -most of who don’t have kids- are finding no subsidies at all, and they can’t afford it either.
sparrow
Hi Richard,
I was wondering if you could give me some advice for getting my mom an exchange plan.
Currently, she is a part-time piano teacher at home, and gets spousal coverage through my dad’s job. He is about to retire (I think the date is Jan 1 but it might be mid-January) and will be eligible for medicaid, social security, etc. as he just turned 66. However, my mom is younger at age 62.5 so will need to get an exchange plan.
I think they should get a subsidy, as their total income in retirement will be around 50k/yr for the both of them. I was planning to come help at Christmas but won’t be there until the 23rd, which is I think the last day to purchase, so kind of late in the game.
THey are super not tech-savy and my dad claims that he got no help from calling into the help line. I wasn’t there so I may be getting a garbled account, but he claimed they told him he wouldn’t get a subsidy, only a “tax credit”. I’m confused what that means.
Would it be possible (legal) for me to gather the documents from my parents myself and sign my mom up online? Or at least get her account going so she can browse plans?
brendancalling
@sparrow: the tax credit IS the subsidy, and you can choose to apply some or all of it right away, bringing down your monthly costs; OR you can choose to apply it at the end of the year, and get a tax refund.
Richard Mayhew
@sparrow: I’m not sure if it is legal for you to sign your mom up… if you have a designated health care power of attorney, maybe, but talk to a lawyer.
Subsidy = tax credit. Different language, same thing. Tax credits are the vehicle for the subsidy. People have the option of collecting them and paying full cost to the insurance company for the premium OR having the tax credit forwarded directly to the company… 99% of the time, I recommend forwarding it directly to the insurance company.
sparrow
@brendancalling: I’m wondering why the bronze plan isn’t worth it? It seems you could afford it, no? I get that it’s not cushy, and doesn’t cover basic things, but it should reasonably function like catastrophic coverage, and thanks to the ACA if the unthinkable occurs (like cancer), they won’t be able to drop you or “max out”. Thus I kind of doubt your assertion that it’s “not worth it”. It would be my choice among your options. But perhaps I a m misunderstanding the price issue.
sparrow
@brendancalling: Thanks, that makes sense. Should have realized that, doh!
Keith P
I’m getting a headache from COBRA lag. I’m on dialysis but between jobs, so my clinic just hit me up (monthly bill is 10s of thousands of dollars) because they show no insurance. And I also have to spend about $150 on buying all my pills for list price. I’ve got 60 days to elect to receive COBRA and then 45 days after that to pay my first premium ($700), then there’s 60-90 days for me to show up in their system as having insurance. Fortunately, everything is all retroactive, and I can eventually get reimbursed for my pills (plus I go on my new employer’s insurance on 1/1), but in the meantime, I’ve got to deal with medical admins being up my ass for money or showing my COBRA forms and hoping that they are cool just seeing it.
I had a 1 week hospital stay once in a phase like this, and I had an admin come into my room while I was getting a blood transfusion and started asking me about what kind of assets I had. Talk about bad timing. Fortunately, I didn’t have anything to throw at said person, but they did send in someone else to talk to me after I got extremely abusive.
sparrow
Hi Richard —
Thanks. And now I remember the question that was particularly urgent. How do we prove what their income will be in retirement vs. what it is now?
Mike in NC
COBRA is a terrible, horrible program. We’ve had it since I got laid off last year and it costs close to $1000 per month. We met another couple in similar circumstances paying $1400 per month. It really is unaffordable! A professional insurance adviser is coming by this week to help us submit a new ACA application. He claims to have learned a great deal the past couple of months. From what I’ve seen of the BCBS options, we stand to save a great deal of money due to the subsidies. However, thousands of other people in this state will go without health insurance due to the refusal of the teabaggers in Raleigh to expand Medicaid here.
brendancalling
@sparrow: If I’m reading the benefits summary correctly, under the Bronze I’d have no help paying for a doctor, no help paying for asthma meds until I met the $6000 (!!) deductible, and depending on how I read it there either IS or ISN’T a limit on out-of-pocket expenses.
Also, and this is a quibble, but the site offers misleadin, or at least confusing and contradictory, information. Fo example, the overview of the Personal Choice PPO Bronze Reserve says that there’s no charge for a visit to your primary doctor or specialist. But when you read the benefits summary, it says that’s only true after you meet you $6000 deductible. If I’m reading that correctly, the patient is set up for a nasty surprise at the doctor’s office. And it’s filled with inconsistencies like that. Pretty much everything is full cost until you meet your deductible.
but yeah, it functions as catastrophic for people who otherwise don’t qualify for catastrophic.
Mnemosyne (iPhone)
@brendancalling:
It doesn’t do you much good now, but this should give you a good incentive to work to get your Republican governor thrown out on his ear. There’s a reason states like California have dozens of affordable choices while states like Penn have fewer and more expensive choices, and it’s because Republican governors refused to cooperate.
I couldn’t quite tell if you’re not eligible for a subsidy or if the subsidy you are eligible for is insufficient, but it might be worth checking with a few insurance companies to see if they have anything decent that’s not on the state exchange. There should also be an option on the exchange for catastrophic coverage in case of disaster, which would at least be marginally better than nothing.
Matt McIrvin
For a while at the worst depth of the recession, there was a pretty sweet federal subsidy for COBRA, not as part of the ACA but as part of the federal stimulus bill (ARRA). I was feeling thankful for it at a time when it looked like I might have to use it (which turned out not to be the case, because I was being laid off by a deep-pockets bigcorp that kept me on the rolls with full benefits for a transitional period, and I lined up another job before my benefits ran out).
But that’s over now.
Matt McIrvin
…and I remember figuring out some dodge similar to what Richard Mayhew describes the time before that that I was out of a job. But I suppose the health insurance mandate means that, after that part of the law kicks in, you might get docked for this on your taxes if you never exercise the option at all.
Of course, that wouldn’t apply to someone pulling it this month, unless they’re somewhere like Massachusetts that already has a mandate (in which case they can also already get insurance through the exchange).
satby
Well, my company magnanimously states that they’ll pay the first 30 days of COBRA, but then they still owe me 3 weeks of pay (which will of course include all my deductions) before my two weeks of severance, so in fact I’m paying for my own COBRA this month anyway. But there’s no way I could elect it, it would take over 1/2 my unemployment. Thanks for this explanation, Richard.
brendancalling (or Richard), don’t all the ACA plans include preventive care?
Mnemosyne (iPhone)
@brendancalling:
Last idea: if your governor hasn’t blocked them from your state, see if you can track down a healthcare navigator. They might have some additional resources/ideas we don’t have here.
ThatPirateGuy
Based on the link you sent me you would never pay more than 6k out of pocket no matter. There is no coverage limit.
Re-read the third column to see what I am talking about.
CaseyL
I was also looking for insurance for the one month gap between expiration of my employer-paid coverage and when the Exchange policies take effect.
I went down to Group Health, in person, to sign up for a policy. The woman I spoke to there gets major, major kudos for telling me about the 60-day retroactive eligibility for COBRA. “Save your money,” she said. “If something happens to you during December, you’ll be covered under your old plan under COBRA – which is probably a better plan.” (The very high premium would be more than made up for by the Gold-to-Platinum level of benefits.)
My “estimated income” for Exchange subsidy is based on my unemployment benefit. Even with the tax credit, the premium still works out to more than $200 per month, for a Bronze policy. I’m trying to decide if I can get by with a Bronze rather than a Silver: weighing how often I go to the doctor for regular visits and how often I need a specialist, to see if I want a plan that’s weighed more toward lower premiums but higher per-visit copays versus a plan with higher premiums but no per-visit copays. (I probably will wind up going with Group Health. My experience with GH is that their primary care providers are caring but incompetent, but their specialists are terrific – and the PCPs are very good about giving referrals.)
brendancalling
@Mnemosyne (iPhone): it’s the latter: the subsidy is insufficient, but about $75-$100.
however, if I quit doing healthy activities like running, dancing, and eating properly, I could afford it. But that would kind of defeat the purpose.
brendancalling
@Mnemosyne (iPhone): we are going to DESTROY Tom Corbett. By the time the election’s over, box seats at Ford Theatre are going to seem like a better option for him.
brendancalling
@ThatPirateGuy: I think that response is for me?
Anyway, i read the third column, and I am confused.
Question 3 says “Is there an out-of-pocket limit on my expenses?”, with the answer “Yes. For participating providers $6,000 person / $12,000 family. For non-participating providers $25,000 person / $50,000 family”
Question 4 asks “What is not included in the out-of-pocket limit?” with the answer “This plan has no out-of-pocket limit/Not applicable because there’s no out-of-pocket limit on your expenses”.
These seem to be contradictory statements. Can you clarify?
When I scroll to benefits, it says “no charge after deductible” for pretty much everything. Which suggests “full charge up until deductible”. Am I reading that wrong?
rachel
@brendancalling: I hope hordes of angry citizens go after all governers like him!
brendancalling
@Mnemosyne (iPhone):
I am sorry to be the bearer of bad news, but it took 3 calls and finally a complaint to the referrer to get my navigator to call me back. And when she did, she didn’t have any information I didn’t already know.
That may be different in your state, of curse. If Pennsylvania was a child, it would have a missing chromosome or two.
Another Holocene Human
Richard, that is quite simply the dumbest suggestion I have ever seen. Who is going to set up a bunch of insurance payments after they were hit by a bus? And deal with the endless denials of coverage?
As someone who had their COBRA retroactively canceled and premiums refunded about a decade ago, there is no way in HELL I would ever advise someone to hang with their ass wide open like that.
brendancalling
@rachel: it’s the schools that are going to bring him down, which i deliciously ironic. A big part of his re-election campaign was predicated on pitting the teachers union against the parents and the cities. In Philadelphia at least, this was a HUGE failure.
We are going to eat that drunk sonuvabitch for breakfast. By the time this is over, he’s going to have to move.
El Caganer
@Mnemosyne (iPhone): It’s not just Corbett. This whole state is nuts. If you look at voter registration (I’m using the PA Department of States numbers), active D’s outnumber active R’s by about 3.8 million to 2.9 million. Yet the executive, legislative and (I think) judicial branches are all controlled by R’s. I love PA dearly, especially Philly (where I live) and Pittsburgh (where I’m from), but the politics are really weird.
Another Holocene Human
@Mike in NC: The amount you pay for COBRA depends on:
the number of people covered
the costs in your area
the size of your company
My wife is on COBRA now but her previous employer was so large that the Exchange plan she’s getting in January is only a few dollars less for comparable coverage.
In the future, smaller businesses will be able to get better deals because of ACA which will make COBRA premiums less expensive for most people.
wmd
I’m currently on COBRA (started in May) and was considering dropping it in January for an exchange policy. Is this possible or do I need to use the entire 18 months of COBRA before I’m eligible?
Guy
@Richard Mayhew: Even if someone like brendancalling has not yet met their deductible, wouldn’t they still benefit from the discounts their plan has negotiated with providers? If so, even a high deductible bronze plan might still be worthwhile.
Richard Mayhew
@sparrow: The basic assumption is that 2014 income will mirror the 2012 income tax return. However, if life circumstances change, as in your parent’s case, they can enter an estimated 2014 income. I would take as my baseline estimate whatever pension, social security, 401(K)/annuity payment from your dad plus an average of the last couple of months of paychecks from your mom and call that a good faith estimate of next year’s income.
Speak with a navigator, they can help you and your mom out.
Poopyman
@wmd: I second the question, having started COBRA in July.
Richard Mayhew
@CaseyL: If you’re on unemployment, think about Silver as there are out of pocket assistance programs for Silver plans only that bring down deductibles into the hundreds of dollars.
kelly
Oregon has decided it will NOT attach a lien to the estates of Obamacare Medicaid (Oregon Health Plan) recipients.
http://www.oregonlive.com/finance/index.ssf/2013/12/cover_oregon_state_says_it_won.html
brendancalling
@Richard Mayhew:
“there are out of pocket assistance programs for Silver plans only that bring down deductibles into the hundreds of dollars.”
Could you identify some of those sources and if any exist in Pennsylvania? this is the first I’ve heard of this. or is that just for unemployed people?
Belafon
@brendancalling: This is where I first heard about it (DailyKos link). Richard can definitely fill in any additional details.
brendancalling
@Belafon: wow. This might actually make a Silver affordable. I need to re-visit the hc.gov website and see if I can find the cost-share option, and then call another navigator, I guess, because mine NEVER brought this up at all.
Richard, any details are appreciated! And, I have an update on the Bronze PPO plan: preventive care IS covered, no deductible, but if that includes a blood test yo pay full price for the test until you hit your deductible. This means that the stethoscope/reflex test/blood pressure is free, but beyond that you pay up front, full cost.
Violet
@brendancalling: But shouldn’t you pay the negotiated rate until you reach your deductible. If they charge $300 for a service, but the negotiated rate is $100, then you pay the full $100, but you don’t have to pay the rest of the $200 the doctor or hospital charges. That’s just some random number the doctor or hospital makes up. The insurance company has a negotiated rate with them.
So you still have to reach the full $6K deductible, but it’s at a cheaper rate per doctor’s visit and procedure.
Richard Mayhew
@brendancalling: https://balloon-juice.com/2013/11/08/cost-sharing-subsidies-and-the-near-poor/ is a good start — I’m tied up but I’ll get more going your way later today or tomorrow.
ruemara
I’m not yet needing COBRA, but I can predict when I’ll be unemployed based on the most recent labor agreement with my bargaining group. Honestly, I’m not sure what to do about health insurance besides stockpiling my medications and getting all my preventative care before the June deadline. Should I get an exchange plan, since I know I’ll be laid off in a set time (or sooner)? Do I wait until the official lay-off? And since this will affect my housing, should I wait until I know where I can set up a semi-permanent mailing address? Poverty is a lot more stressful to keep organized than one would think.
Richard Mayhew
@ruemara: You can not get Exchange plan with any subsidy if you already have qualified coverage. You’ll need to wait to officially be laid off before you can shop on the Exchange outside of the open enrollment period. Set up an account, shop, look around and get as much paid for by the current insurnace carrier before you get laid off so you don’t have to pay a new deductible.
catclub
Can I assume that someone else has already pointed out that drones are very low efficiency vehicles for transporting large masses. I guess if you have drones just for the last mile, that might be ok, but that would mean a lot of drones.
ruemara
@Richard Mayhew: OK. I figured it was so but good to have expert confirmation. Thank you.
Matt McIrvin
Another Holocene Human’s objection is actually something I worried about as well. Suppose you take advantage of the grace period and you actually do have a medical emergency during that time. How realistic is it that you’ll be able to manage an emergency activation of COBRA continuation and get your coverage? (Especially if you’re completely incapacitated?) Granted that COBRA continuation is easier to flip the switch on than signing up for wholly new insurance.
Richard Mayhew
@Matt McIrvin: Pretty easy — if you are worried about that, get someone signed up as a health care and financial power of attorney with a limited grant of power to only activate COBRA and more importantly feed the cats.
Mnemosyne
@brendancalling:
Argh. That really sucks. It does seem like the Republicans are doing their best to sabotage everything from top to bottom. Assholes.
@ruemara:
IIRC (and Richard can confirm), if you get laid off, you can jump right to the exchanges without having to wait for the next open enrollment period so, as he said, it’s probably worth setting up an account with CoveredCA.com now so you can pull the trigger once the layoff actually happens.
karen
Richard, I live in MD and right now I get COBRA until 18 months from May 24 when I got laid off…or June 1, not sure. By what I read here, I realize that paying $388 a month for getting the same great insurance I had when I was working may seem like nothing comparably. I have Rheumatoid Arthritis, Fibromyalgia and I’m Bipolar. Because of that, my meds are not cheap but on the insurance I have, once I pay $2,500 out of my pocket ($1,500 deductible and $1,000 co-insurance) my drugs and my doctor visits are free. Should I stay on COBRA as long as I can afford or would I get something decent with the MD exchanges for less money? I ran out of unemployment and am now on the Unemployment compensation extension which unless there is a last minute extension runs out on Dec. 31. Thanks for your advice.
Three-nineteen
@Matt McIrvin: It’s really easy – takes less than 5 minutes on the COBRA website, as long as you keep the exact coverage you had while you were working.
My saga may be at an end. Tried to sign up in early Nov (I’m in WI, so federal exchange), but the website wouldn’t verify my identity. Called in and got my identity verified bu Girl Number One over the phone. Tried the website a couple more times, but it never saved my information properly, so I just kept on re-entering the same stuff. Three weeks ago, called again and got my application completed over the phone – the girl said they would email me my plan options. Never got an email, called back 10 days ago. Girl Number Two said there was a problem with my application, but she couldn’t fix it – someone else would call me. Never got a call.
My due date for re-upping my COBRA insurance for 2014 was Nov 22nd. Decided to take a leap of faith and not sign up, betting that Obamacare would be cheaper and I would be able to sign up in time.
Today I hear the website is “fixed”, so I go back. Still can’t fill out an application, but now you can look at plans without applying. Found a plan I liked, and $200 a month cheaper than the COBRA insurance. Called back and explained my situation to Girl Number Three. She was able to fix my application and sign me up for my preferred plan. If I get an email from the insurance company in the next couple of days, I won’t have to call again and talk to Girl Number Four.
Of course, I have an interview tomorrow and if I get that job, I won’t need Obamacare at all. Wish me luck!
Matt McIrvin
@Richard Mayhew: @Three-nineteen: Thanks for the replies. I think that the last time I actually signed up for COBRA, or was close to doing so, was around 2006, which was a long time ago in Internet terms.
That was right around the time the Romneycare exchange was just starting up, and I remember being really unclear on whether I could use it or whether there would be any advantages for me over just going with COBRA.
Richard Mayhew
@karen: I don’t know. Talk with a navigator or an insurance broker and go over the exact details of your situation.
Richard Mayhew
@Three-nineteen: good luck
Mike
This item makes no sense without working links. Could you please restore the links? Thanks.