Should I ditch COBRA and switch to an individual plan?
May 16, 2012 4:31 PM   Subscribe

Health insurance question: I got laid off from a small company a few months ago, and have been paying over $400 monthly for COBRA. This eats up a ton of my unemployment money. I'm wondering if I should switch to an individual plan.

I am 30, female, relatively healthy, but have been visiting the doctor about once monthly recently for an acid reflux problem.

My COBRA insurance kind of sucks - the deductible is relatively small ($750), but I still need to pay 35% of any labs, tests, etc.

It looks like my insurance provider has a few individual plans that cost a couple hundred bucks less monthly, with similar deductibles and the option to pay between 30-40% in coinsurance for labs, etc.

It's entirely possible that I might need to go to a gastro to get a few more tests for this GERD issue. My question is - is there any reason I shouldn't try to switch plans and save $200 bucks monthly, if the insurance is basically the same?
posted by emily37 to Health & Fitness (19 answers total) 1 user marked this as a favorite
I don't see why not. I used my state's health insurance website to find a plan that costs me $80 per month. It's got prescription coverage and coverage for catastrophic events. I think the deductible is $2500.

Had I chosen COBRA when I got laid off, it would have cost me over $300 per month.
posted by reenum at 4:42 PM on May 16, 2012

Just a different take: $400/month would buy tons of alternative/DIY healthcare out of pocket. Consider researching that as well. I have pursued alternative treatments out of pocket for years for far less money than conventional treatments for my condition are supposed to cost. I also got better results than doctors could give me. Plus I worked for an insurance company for five years. I don't have a high opinion of what that system is all about.

Best of luck.
posted by Michele in California at 4:49 PM on May 16, 2012

If you are able to find an individual plan that will cover your GERD tests/treatment for cheaper than what you're paying for COBRA, then go for it.

People who go the COBRA route do so because they have preexisting conditions that make buying individual insurance either impossible or tremendously cost prohibitive.

As long as it fully covers your GERD, you're fine. (You run into trouble if a preexisting condition doesn't get fully disclosed and covered within (I believe) 62 days between insurers, as that's grounds for your next insurer to not cover that condition.
posted by phunniemee at 4:53 PM on May 16, 2012 [2 favorites]

Since you have an ongoing issue, I wouldn't recommend what Michele in California's said -- you need to stay continually insured.

I am around your age and buy my own insurance for about $115 a month, and in addition to the benefits provided by that and the peace of mind that I've continuous coverage, there's a significant psychological benefit to not depending on my job to provide me benefits. I'm much less likely to put up with a crappy workplace if I know I will continue to be insured even if I leave.
posted by fiercecupcake at 5:01 PM on May 16, 2012

Michele, fiercecupcake isn't shooting down your advice because of the sketchy woo nature of "alternative stuff." It's being shot down because if emily37 goes without formal health insurance coverage for more than 62 days, anyone she tries to obtain health insurance with in the future will have grounds to deny her coverage for anything relating in any way to her GERD issues. For that reason, forgoing health insurance (whether to pursue alternative treatments on her own or just because she wants to) is a terrible idea.
posted by phunniemee at 5:16 PM on May 16, 2012 [4 favorites]

Thanks for the clarification, phunniemee; yes, that's exactly my reasoning.
posted by fiercecupcake at 5:24 PM on May 16, 2012

Mod note: AskMe is not the place for debates. Once you've offered your advice, please move on even if people offer differing advice.
posted by restless_nomad (staff) at 5:41 PM on May 16, 2012

Response by poster: Thanks everyone! So are you guys saying that since it will be less than 62 days between when I ditch COBRA and get new insurance, they won't be able to turn me down for my GERD? That's the one thing I'm afraid of, that I'm going to be stuck with this expensive COBRA if I don't get approved for an individual plan.
posted by emily37 at 5:50 PM on May 16, 2012

when I ditch COBRA and get new insurance, they won't be able to turn me down for my GERD?

Well, here's how it is as I understand it...

When you get health insurance through your employer, there is a set premium rate per month for your plan regardless of your preexisting conditions. (So, at my job, my never-been-sick-a-day-in-his-life coworker pays the same amount that I do, even though I have preexisting conditions up the wazoo and, in reality, cost the insurer more in the long run. Healthy guy pays extra so that I can pay less. Same if one employee is really young/healthy and another is much older. Or pregnant. Or whatever. That's why health benefits through your job are so great.) That insurer, though, can refuse to cover certain conditions of yours if you have failed to meet the requirement to always have that condition insured.

When you get private health insurance, however, the amount you pay for your premium takes a lot of different factors into account (your current health level, what kind of coverage package you're getting, what preexisting conditions you have, etc). For me, personally, obtaining individual health insurance would be more expensive than COBRA. For you, that may not be the case. This is something you would need to discuss in detail with whomever you plan to go with for private insurance. You will pay extra for your GERD.

The 62 day limit thing only comes into play when you go back to being insured through an employer, or similar group package. As long as your preexisting condition was covered previously, it will be covered by your new insurer. (And I can't speak to this personally, but I would imagine that if you have a preexisting condition that was not covered by your previous insurance, covering it through private insurance would cost more than what it would had you been covered.)

Anyway, absolutely do NOT drop the COBRA until you know for sure whether your GERD will be covered by the individual insurance option you choose. Once that criteria is met, you ought to be fine.

Mostly it's just a whole lot of bullshit designed to confuse you into not insuring yourself properly and screwing yourself over down the road. I had to deal with this myself a few months ago when I turned 26 and got booted off my parents' plan while unemployed, but thankfully I was able to find a job with great benefits within that 62 day window. I spent a lot of time mired oh-holy-hell-cobra-aint-cheap dread, and hopefully you'll be able to avoid that. Good luck! I suggest you start calling individual insurers ASAP and see what options are available to you.
posted by phunniemee at 6:11 PM on May 16, 2012

Response by poster: Actually, at my previous employer, my insurance premiums continually went up as I got older. But I worked at a tiny startup with crappy coverage.
posted by emily37 at 6:13 PM on May 16, 2012

they won't be able to turn me down for my GERD?

Even after all that...

To clarify, it's not that the private insurer will deny you coverage for your GERD, it's that it will cost more than a basic, healthy-person plan.
posted by phunniemee at 6:13 PM on May 16, 2012

Just fyi, when I was on unemployment and paid insane amount for COBRA coverage, most of it was reimbursed back to me through my unemployment. Maybe this varies state to state (I'm in Mass), but look into it.
posted by Shusha at 6:15 PM on May 16, 2012

This is the deal in Massachusetts. But of course we are sorta special in the medical insurance area...
posted by Shusha at 6:19 PM on May 16, 2012

Response by poster: I know that there were governmental COBRA subsidies a couple years ago, but you had to lose your job before May 2010 in order to qualify. There definitely isn't anything like that here in CA. I'd say Massachusetts is usually way ahead of other states when it comes to taking care of its citizens.
posted by emily37 at 6:20 PM on May 16, 2012

First, be absolutely rock solid about disclosure.

Second, price different policies on esurance and other websites and identify a policy or two

Third, model your expenses for six months assuming both. Do a full accounting.

If it makes sense, switch.

(I quit a job back in 2009 and ran on cobra for 7 months. I would have killed for 400$/month coverage.)
posted by rr at 6:34 PM on May 16, 2012

You already have known medical issues, so if you get a plan with a low deductible it will be very expensive. I'd recommend just getting what's called major medical, basically a health plan with a huge deductible like $5k or so. It means you're out of pocket for most of your day-to-day expenses, which sucks, but it also means that you're likely going to be able to get insurance for far far less. Also, you'll be getting the discounted healthcare rates that insurers arrange with hospitals, doctors, etc.

Since you are young, it's worth getting an accident rider, which covers you up to $500 for any health problems that come from an accident which other than the GERD is your most likely cause for healthcare costs. So for example if you're in a bike accident, the first $500 of costs would be paid for by the insurer before you have to cover anything. It's generally pretty cheap, I think it was less than $10/month extra.

Dont wait around on the insurance. Even if it's technically okay to be not covered for a while, better safe than sorry. With both or either insurer, you should be able to pro-rate the month so you are never in the position of paying both at the same time.

Before using an online website, see if there's a local insurance reseller/agent who can help you. So long as you have an idea of how much you want to spend and are aware of the normal prices, you'll be just as well off using an agent because as I understand it, the prices for insurance are fixed so you don't pay more just because you went through a person rather than a website. Then, if something goes wrong, you have a person you can talk to who already is aware of your situation.
posted by Deathalicious at 9:15 PM on May 16, 2012

To clarify, it's not that the private insurer will deny you coverage for your GERD, it's that it will cost more than a basic, healthy-person plan.

Or you may be denied due to GERD (or some other minor thing). It's amazing what small issues you may be denied for. Just know that it's a possibility. I second the advice not to cancel your COBRA until you have another policy in effect. I have had some companies (Blue Cross) take one month to review my application so don't wait until the last minute because that window of non-coverage will sneak up on you.
posted by Bunglegirl at 6:14 AM on May 17, 2012

I have had some companies (Blue Cross) take one month to review my application so don't wait until the last minute...

Underwriting can take a month or longer. Also, I've run across insurers *COUGH*goldenrule*COUGH* require that you actually make an estimated payment during the underwriting period.

Quite honestly, $400/month isn't bad for medical insurance, if it's a traditional PPO plan. Be up-front about your GERD and don't hide anything. They will discover your pre-existing conditions sometime down the road and use your non-disclosure to either jack your rates through the ceiling, or cancel your coverage due to fraud. That said, be prepared for sticker shock.
posted by Thorzdad at 6:37 AM on May 17, 2012

Yes, to be absolutely clear, unless the private coverage you want to move into is a very special type of plan (VERY UNLIKELY), the insurer may:

*Decline to cover you because you have GERD
*Cover you, but charge you very high premiums
*Cover you with or without very high premiums, plus exclude coverage for all GERD-related care for the life of the policy

It's also possible that you'll get the lower rate with no GERD exclusions but honestly that's not terribly likely. Keep in mind, you usually have to send your check in for the first month's premium before they've made an underwriting decision, so whatever you do, DO NOT drop your COBRA coverage and assume you're okay. It's very likely that you won't be better off under individual insurance with a pre-existing condition (although it's definitely worth a shot, as long as you don't drop what you have!)
posted by iminurmefi at 6:50 AM on May 17, 2012

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