How to choose between COBRA and for insurance?
March 23, 2020 2:38 PM   Subscribe

I was laid off and my employer will cover COBRA for six months. After that six months, I can go with a plan from I don't consume a lot of health care and the difference between paying for COBRA and is about $130. What metrics should I use to make this decision? Are there any benefits other than familiarity to stay with COBRA over

I'm 45, single, pretty healthy, and currently have an Anthem Blue Cross medical plan and an Aetna dental plan under COBRA.

I get an annual checkup, no prescriptions. I see a specialist once a year to monitor a health condition. I am fairly active though. I can get a plan that costs $477 that my PCP and specialist accept compared to the $611 that COBRA costs.

For dentistry, I have two cleanings a year and a set of X-rays. Out of pocket costs for dentistry are about the same as COBRA, so I think it makes sense for me to keep the Aetna dental plan at $42, but I've heard some people say dentistry coverage is a luxury too.

Is it worth it for me to switch from COBRA to Obamacare for the medical to save $130 a month?

I have decent savings, so an extra $130 is nice but not the end of the world. But maybe there are benefits to staying with the brand name plan. On the other hand, I don't want to be throwing money out the window that I don't have to.

Thanks for your advice!
posted by anonymous to Work & Money (11 answers total) 1 user marked this as a favorite
How does the catastrophic coverage differ? Ambulance rides, broken arms, emergency surgery, etc... say hypothetically you randomly got a severe respiratory infection and you had to be on a ventilator for 2 weeks... which coverage would you rather have?
posted by brainmouse at 2:44 PM on March 23 [3 favorites]

Can you somehow update this with the table of deductibles, co-pay and max out of pocket? Agree with the above that ambulance and hospitalization coverage is important, too.

It’s hard to say without that information, but it’s possible your current plan could leave you more than $1800 (12*$150) better off than the cheaper plan if something actually happens to you. If that’s true then it comes down to betting on your health.
posted by michaelh at 2:49 PM on March 23 [4 favorites]

How do the deductibles compare? Will you just be paying on a deductible on your current plan, only to have to start over again if you need medical care in November? Then again, if you’re not making much of a dent until then maybe it doesn’t matter.

You used to be able to elect COBRA coverage retroactively, so you could wait and see and then pay (all the accrued) premiums, but I don’t know that I’d go the whole 6 months that way.
posted by Huffy Puffy at 2:50 PM on March 23 [2 favorites]

You might qualify for subsidies for plans in six months if you're not working or aren't earning much.

COBRA is only retroactive if you end up signing up within 60 days--it's not for the whole time you could potentially get COBRA. But if the employer is going to pay for the first six months, I'm not sure that is relevant anyway.
posted by needs more cowbell at 2:58 PM on March 23 [1 favorite]

If you choose COBRA you'll want to make sure you know whether you'll be able to switch to other coverage at the end of those six months or whether you'll have to wait for open enrollment to do so. Normally the end of your employer paying for COBRA does not count as a qualifying event.
posted by wuzandfuzz at 3:24 PM on March 23

The end of your employer paying for COBRA is absolutely a qualifying event:

Outside Open Enrollment:
"If your COBRA costs change because your former employer stops contributing and you must pay full cost"
"Yes, you can change — you qualify for a Special Enrollment Period."
posted by brainmouse at 3:32 PM on March 23 [2 favorites]

I had to make this decision, some relevant points:

Marketplace plans can change pretty drastically year-to-year, for instance the one I was looking at switched hospital networks so I would have had to switch providers even if I stayed on the same plan. So if it works out that there are only 3 months until the end of the year, stick with COBRA. If they pay for 6 months starting now that's probably how your timing would work out. This also applies if your marketplace plan options have a high deductible, you're much less likely to hit it if you only have 3 months

For specific technical tax reasons, in most cases if you are self-employed you can deduct premiums from marketplace/private plans, but not from COBRA, because COBRA is technically in your old employer's name. I didn't realize this and made some faulty tax assumptions
posted by JZig at 3:38 PM on March 23

I have an ACA plan through NY’s exchange (we are unable to buy private plans in the state) and am extremely limited for hospitalization to in network hospitals in my state. This was never a concern until covid, as I’m healthy in my late thirties with minimal doctor visits, but now we are unable to self-isolate in Michigan where we have a home due to insurance restrictions.

I paid for COBRA for the entire time it was offered just for the increased flexibility, but am now beyond that time frame.
posted by icaicaer at 4:23 PM on March 23

Agree with others that deductable, co-insurance, usage scenarios matter.

Here my work sheet that shows how I thought about the math.
posted by gregglind at 4:46 PM on March 23 [1 favorite]

I have a similar health care usage profile and went through this decision last year. In addition to comparing monthly payments and deductibles between plans, you should also look at coverage and out-of-pocket maximums for out-of-network procedures. My exposure on out-of-network costs was MUCH higher on the ACA plan, while the monthly fees and deductibles were similar. This difference was not obvious when looking at the plan summary information—carefully read the fine print so you can uncover lurking exposure that might exceed your personal risk tolerance.
posted by 4rtemis at 5:12 PM on March 23

Are you saying that your employer wlll pay the costs of your COBRA for 6 months? And you won't pay anything? That's fabulous, you're very lucky!!

I see no reason not to take that, then switch to ACA after the 6 months is over. You may even have another job by then and this will be a moot point.
posted by mccxxiii at 6:19 PM on March 23 [2 favorites]

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