Should I use COBRA or ACA to cover a one-month gap in coverage?
June 15, 2017 11:10 AM   Subscribe

I recently got laid off. The good news is, I quickly found another job. My old coverage stops at the end of June. My new coverage doesn't start until the end of July. I need to find a way to get us coverage during the gap. We have pre-existing conditions and are on regular meds.
posted by grumblebee to Health & Fitness (14 answers total) 2 users marked this as a favorite
 
Check the terms of your severance -- at my company, they keep you on insurance thru the end of the month and then pay 1 month of COBRA. Also, check your COBRA paperwork -- I believe you some time to sign up for COBRA and it is retroactive to when you left your employer.
posted by elmay at 11:14 AM on June 15, 2017 [1 favorite]


I know for sure that my health insurance runs out at the end of this month. My previous employer is not going to pay for COBRA. And I know for sure that my new coverage will start at the end of July. I just need coverage for July.
posted by grumblebee at 11:18 AM on June 15, 2017


I was in a similar situation recently. I refilled my 90-day supplies about 2 weeks before my old job ended, and as part of the offer negotiations, asked them to cover the COBRA premium for the month it would take me to become eligible for insurance. (New job had 30 day waiting period). I also re-scheduled any/all drs appts until new coverage kicked in (and had as many appts as needed before leaving, kid physicals etc)

If you've missed the negotiations boat, COBRA has a window where you can sign up (45 days ?) so you can roll the dice on being uncovered for the 30 days, and if nothing happens, you're OK. (and if something does happen, you can retroactively apply for COBRA).
posted by k5.user at 11:18 AM on June 15, 2017


K5.user, are you saying that I can have no insurance at all, but then, either my wife or I get sick, I can get COBRA instantly, so we can get help?
posted by grumblebee at 11:22 AM on June 15, 2017 [2 favorites]


Just to be really clear, let's say I'm in the middle of the gap period, and I have no coverage. My wife gets into an accident, she's rushed to the hospital and has to have expensive surgery. Are you saying that after that happens, I can sight up for COBRA and they're cover those costs, even though they happened before I signed up for it?
posted by grumblebee at 11:27 AM on June 15, 2017


Getting late off is a qualifying event to enroll in an ACA plan. Going that route may be a cheaper option than COBRA
posted by TheCavorter at 11:28 AM on June 15, 2017 [1 favorite]


Are you saying that after that happens, I can sight up for COBRA and they're cover those costs, even though they happened before I signed up for it?

Yes, this is one of the things about COBRA. You don't have to sign up right away, but if you need it, you can sign up then and the coverage will be retroactive to back to the date of termination of your old coverage.

If I were in your situation I would try to get medication filled to get me through the month and not pay for anything unless you have an event that necessitates it. And even if you can't get the meds filled before you lose coverage, it might be less expensive to pay for them out of pocket for just the one month rather than paying for a whole month of COBRA.
posted by something something at 11:32 AM on June 15, 2017 [12 favorites]


It's been a few years since I last had to research COBRA, but at least at the time, yes, you could sign up for COBRA even after your wife's hypothetical accident and the costs of the accident would be covered. I believe the window was 60 days at the time. You would have to retroactively pay the COBRA premium for that month when the accident had happened, but in a situation like that, the COBRA premium would almost certainly be less than your hospital bills, and so it would be worth it. (Whereas, if the only thing you incurred in those 60 days was, say, an urgent care bill for some bronchitis medicine, you might opt to just pay that in cash vs. paying the COBRA premium which might be more, ultimately.)

Read all your fine print, for sure, but COBRA is designed for the situation you're proposing, unless they've made drastic changes to it in the past few years.
posted by Stacey at 11:34 AM on June 15, 2017 [1 favorite]


From The Center for Consumer Information & Insurance Oversight (cms.gov) FAQs about COBRA (with emphasis added)

"Q14: How do I elect COBRA?

Qualified beneficiaries must notify the plan administer of their election according to the instructions laid out in the election notice. Qualified beneficiaries must be given an election period of at least 60 days during which each qualified beneficiary may choose whether to elect COBRA coverage. This period is measured from the later of the date of the qualifying event or the date the COBRA election notice is provided. COBRA coverage is retroactive if elected and paid for by the qualified beneficiary."
posted by AgentRocket at 11:43 AM on June 15, 2017 [2 favorites]


Yes, you can elect COBRA retroactively - I think we had 60 days. I had a month coverage gap for my son and me back in February, and buying a policy through the ACA or adding ourselves to my husband's plan was more expensive than the $1600/month COBRA cost because I didn't have a deductible on my employer plan but would through the other options. So this is what I did:

1) refilled one insanely expensive ($38,000) medication on the last day of our existing coverage, knowing that we had a couple months of backup supply to last us through one limbo month and a cushion into the next month to cover new insurance pharmacy bullshit (1.5 weeks of new insurance/pharmacy bullshit happened due to it being a rare specialty med)
2) refilled another medication without insurance during the limbo month and paid the retail price because $140 was less than $1600 + copay (this was a refrigerated/compounded medication with a 28-day shelf life, so there was no way we could stockpile extra)
3) made a plan for myself to go to a Minute Clinic or whatever if I got moderately sick
4) made sure my son's regular clinic appointments were not scheduled during the limbo month
5) filled out the COBRA forms and kept them on the fridge in case of an emergency
6) prepared myself (and my checking account) to pay the COBRA cost in the event of an ER trip or hospitalization for my son because $1600 + copay is less than $5000-35,000 (the retail price of our previous hospital stays)

In sum, run the numbers for your own situation. Your costs under COBRA will be your premium plus your normal copays - ask about if the deductible starts over under COBRA so you aren't surprised.

We made it work and saved a lot of money but only because I planned out every detail.
posted by Maarika at 11:46 AM on June 15, 2017 [6 favorites]


(P.S. the Obamacare penalty for not having coverage does not apply if your gap is less than three months.)
(P.P.S. not your lawyer and all that stuff.)
posted by AgentRocket at 11:46 AM on June 15, 2017 [3 favorites]


Just to be really clear, let's say I'm in the middle of the gap period, and I have no coverage. My wife gets into an accident, she's rushed to the hospital and has to have expensive surgery. Are you saying that after that happens, I can sight up for COBRA and they're cover those costs, even though they happened before I signed up for it?

Yes. This happened to me. I quit my job and started the new job but didn't have health coverage for a month or so (I forget why). I got pneumonia and was admitted to the hospital for three days. I signed up for COBRA while I was in the hospital and pretty much everything related to the illness/hospitalization was covered.
posted by cooker girl at 12:45 PM on June 15, 2017 [3 favorites]


Previously: Minding a health insurance gap.

This in particular seemed like good advice:

What I usually tell people who will have a less than 60 day gap:

1. Fill out the COBRA paperwork
2. Put it and a check for the premiums in an addressed envelope with a stamp.
3. Put the envelope somewhere obvious.
4. Tell significant other / friend: "If I'm in the hospital, mail that envelope."
5. Once you get new coverage, shred the envelope.

posted by Mr.Know-it-some at 1:12 PM on June 15, 2017 [12 favorites]


Aside from any other reason, I would go with COBRA because there is less chance of a paperwork screwup.
posted by SemiSalt at 2:09 PM on June 15, 2017


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