Last minute COBRA
March 16, 2006 9:34 AM Subscribe
Last minute COBRA coverage. A what-if scenario..
Let's say you're out of a job and are eligible for COBRA to continue your health insurance. As I understand it, the coverage is retroactive back until your original insurance ended. So if you wait, say, 3 months before signing up, you would have to "backpay" all three months.
So would the following be valid and legal:
Do not sign up for COBRA. Pay for doctor and/or medication out of pocket. If something really bad was to happen, where the bills amount to the thousands or tens of thousands of dollars, only then fill out the paperwork and pay for all the months in between, in order to have the recent "something really bad" event get covered.
Some other details/assumptions -
- There's a deadline to how long you can wait before signing on for COBRA. I think it's 2-3 months. So there's a fixed time-frame here.
- The assumption is that I'll be back in a new job with health benefits in 2-3 months time.
- The extent of my medical bills is about $15-30/month for an asthma inhaler, so it's hard to justify paying a hefty sum of money in order to effecitvely get a small discount on my inhaler.
You would think that COBRA and/or the insurance carriers would have safe-guards against people doing exactly what I describe. So does anybody have a good understanding of this and can explain to me why this may or may not be a really bad idea.