Help me decide: COBRA vs. Obamacare
January 30, 2024 9:51 AM Subscribe
My company sponsored healthcare insurance ends tomorrow and I’m spiraling since the cost to extend medical and dental coverage for my family is just under $3,000 a month! Have you been in my situation and went with the Marketplace?
I’m freaking out at the price tag and can’t think straight in terms of all the factors I have to consider: Premium cost, deductibles, co-insurance, timing to sign up, etc.etc..
Since I had a procedure earlier this month and spent $2,300 out of pocket I’m $781 away from meeting my family in-network deductible. I have until 4/3 to sign up, which I guess means I could try to wait until I get my next job, hope I don't need healthcare in the interim... then start coverage then. But this is risky and in this environment I’m not getting the sense that I’ll find something before then. And if I elect to take COBRA at that point, I’ll owe $9,000 for Feb, March and April.
According to Healthcare.gov It appears I qualify for a “Special Enrollment Period” since I’m losing my coverage tomorrow, but I'm unclear if my state's (NJ) program has those same rules.
They are asking for my yearly income… I guess this is for this year alone? If so -- I base that on my unemployment payments, and I presume my anticipated severance?
What about the plan options? Are they decent? Will I have to find all new doctors?
I'm struggling with fear and anxiety, so apologies for the rambling nature of this post and thank you in advance for helping me think through this!
I’m freaking out at the price tag and can’t think straight in terms of all the factors I have to consider: Premium cost, deductibles, co-insurance, timing to sign up, etc.etc..
Since I had a procedure earlier this month and spent $2,300 out of pocket I’m $781 away from meeting my family in-network deductible. I have until 4/3 to sign up, which I guess means I could try to wait until I get my next job, hope I don't need healthcare in the interim... then start coverage then. But this is risky and in this environment I’m not getting the sense that I’ll find something before then. And if I elect to take COBRA at that point, I’ll owe $9,000 for Feb, March and April.
According to Healthcare.gov It appears I qualify for a “Special Enrollment Period” since I’m losing my coverage tomorrow, but I'm unclear if my state's (NJ) program has those same rules.
They are asking for my yearly income… I guess this is for this year alone? If so -- I base that on my unemployment payments, and I presume my anticipated severance?
What about the plan options? Are they decent? Will I have to find all new doctors?
I'm struggling with fear and anxiety, so apologies for the rambling nature of this post and thank you in advance for helping me think through this!
GetCoveredNJ Customer Service - you may want to wait a few days for the open enrollment crowds to die down.
posted by ThePinkSuperhero at 10:01 AM on January 30 [2 favorites]
posted by ThePinkSuperhero at 10:01 AM on January 30 [2 favorites]
So sorry about your job loss! And I agree that talking to someone at the marketplace is a good idea, but for some quick answers:
They are asking for my yearly income… I guess this is for this year alone? If so -- I base that on my unemployment payments, and I presume my anticipated severance?
This is to estimate your premium subsidies, so you actually want to estimate how much money you are likely to earn in 2024 - like, if you're on unemployment and severance for 4 months and then you get a job that pays $X/month that you keep for the rest of the year, your yearly income will be:
The amount of money you've already earned in January +
4 months worth of unemployment and severance +
7 months worth of new job salary
It's just an estimate - they know you don't know exactly how much you will make this year. If you underestimate, you will pay less in premiums now but owe money back at tax time; if you overestimate, you will overpay in premiums but get a tax credit next year. So if you estimate your 2024 income really pessimistically but then get a well-paid job faster than you expect, set a little money aside in case you need to repay some of your premium discount.
According to Healthcare.gov It appears I qualify for a “Special Enrollment Period” since I’m losing my coverage tomorrow, but I'm unclear if my state's (NJ) program has those same rules.
Losing coverage you get through a job is a qualifying life event - you shouldn't have any problem signing up for new insurance.
What about the plan options? Are they decent? Will I have to find all new doctors?
You're going to have to look and see how they compare to your existing coverage, which is a huge pain in the ass! But FWIW you are often able to buy very similar coverage on the exchange to what you get through your employer, administered by companies like Blue Cross, etc. (downside: possibly at very similar cost).
posted by mskyle at 10:07 AM on January 30 [3 favorites]
They are asking for my yearly income… I guess this is for this year alone? If so -- I base that on my unemployment payments, and I presume my anticipated severance?
This is to estimate your premium subsidies, so you actually want to estimate how much money you are likely to earn in 2024 - like, if you're on unemployment and severance for 4 months and then you get a job that pays $X/month that you keep for the rest of the year, your yearly income will be:
The amount of money you've already earned in January +
4 months worth of unemployment and severance +
7 months worth of new job salary
It's just an estimate - they know you don't know exactly how much you will make this year. If you underestimate, you will pay less in premiums now but owe money back at tax time; if you overestimate, you will overpay in premiums but get a tax credit next year. So if you estimate your 2024 income really pessimistically but then get a well-paid job faster than you expect, set a little money aside in case you need to repay some of your premium discount.
According to Healthcare.gov It appears I qualify for a “Special Enrollment Period” since I’m losing my coverage tomorrow, but I'm unclear if my state's (NJ) program has those same rules.
Losing coverage you get through a job is a qualifying life event - you shouldn't have any problem signing up for new insurance.
What about the plan options? Are they decent? Will I have to find all new doctors?
You're going to have to look and see how they compare to your existing coverage, which is a huge pain in the ass! But FWIW you are often able to buy very similar coverage on the exchange to what you get through your employer, administered by companies like Blue Cross, etc. (downside: possibly at very similar cost).
posted by mskyle at 10:07 AM on January 30 [3 favorites]
In your situation, my first question would be whether staying with my same insurer (via the marketplace, to be clear) is an option and whether it would mean I got to keep credit for the deductible spending thus far. If so, that's a significant point in favor of looking for marketplace plans with that insurer. Sticking with them would likely also let you keep your same doctors etc., though of course you'd want to verify that. So I'd try calling your insurer and asking that, just to start with, since it might knock down your marketplace options substantially.
For whatever it's worth, I have been super super happy with all the marketplace plans I've gotten. They have worked exactly as advertised, no ridiculous exclusions or surprises like when I had healthcare through an employer. Some of that probably is just ACA itself being more humane than what was in place before, but still, if some of your worry is that the plans are inherently crappy compared to what you've had, that's just not true.
posted by teremala at 10:08 AM on January 30 [6 favorites]
For whatever it's worth, I have been super super happy with all the marketplace plans I've gotten. They have worked exactly as advertised, no ridiculous exclusions or surprises like when I had healthcare through an employer. Some of that probably is just ACA itself being more humane than what was in place before, but still, if some of your worry is that the plans are inherently crappy compared to what you've had, that's just not true.
posted by teremala at 10:08 AM on January 30 [6 favorites]
Since I had a procedure earlier this month and spent $2,300 out of pocket I’m $781 away from meeting my family in-network deductible.This is definitely a factor when comparing costs. If you switch insurers now, you start from scratch with $0 paid toward your deductible and out-of-pocket maximum. So, for example, a marketplace plan with similar premiums and a $1500 deductible might actually cost you more than your COBRA plan with only $781 deductible remaining.
In a similar situation, I used COBRA for the remainder of the calendar year after leaving my job, and then used Open Enrollment to switch to a marketplace plan at the start of the next calendar year. Whether this makes sense for you depends on a lot of factors (some of which you can only estimate), but it is one of the options you should be considering.
posted by mbrubeck at 10:19 AM on January 30
If your family includes kids, you may want to look into your local CHIP program, NJ FamilyCare, which provides subsided coverage to kids (eligible up to up to 355% of the Federal Poverty Level - $8,875/month for a family of four). If eligible, there is no premium or copay. I've seen several folks get their family insured much more cheaply by covering the kids with CHIP and the adults with an employer or Marketplace plan. Not sure if you could combine CHIP with COBRA in this way, but it's worth an ask.
posted by ourobouros at 10:52 AM on January 30 [4 favorites]
posted by ourobouros at 10:52 AM on January 30 [4 favorites]
Another benefit of CHIP (in states like NJ, at least) -- assuming your January pay + severance + projected unemployment maximum places you below the eligibility threshold -- is that it'll cover your kids for at least a full year no matter what, and you don't need to worry about any of it getting clawed back if your income later goes up before year's end. Probably worth looking into even if you might otherwise already be happy with what you find on the exchanges.
posted by nobody at 11:13 AM on January 30
posted by nobody at 11:13 AM on January 30
Will I have to find all new doctors?
Not necessarily. I went from COBRA to Obamacare and kept the same insurance plan, so all the doctors etc that I was familiar with are still covered. I do pay more for this, though; there was a cheaper plan that would have involved massive changes in who we could go see, and we decided it wasn't worth it. (Not only because we like our doctors, but because it's so hard to get in to see doctors as a new patient.)
posted by The corpse in the library at 12:15 PM on January 30
Not necessarily. I went from COBRA to Obamacare and kept the same insurance plan, so all the doctors etc that I was familiar with are still covered. I do pay more for this, though; there was a cheaper plan that would have involved massive changes in who we could go see, and we decided it wasn't worth it. (Not only because we like our doctors, but because it's so hard to get in to see doctors as a new patient.)
posted by The corpse in the library at 12:15 PM on January 30
I was in your situation. I switched to an Obamacare plan which was cheaper with better coverage.
I suggest that you call. The online self-serve platforms are confusing. I cannot speak to your state, but in my state the staff on the phone are incredibly helpful and nice and one of them short-circuted an anxiety attack I was having and got me sorted.
posted by rednikki at 12:44 PM on January 30 [1 favorite]
I suggest that you call. The online self-serve platforms are confusing. I cannot speak to your state, but in my state the staff on the phone are incredibly helpful and nice and one of them short-circuted an anxiety attack I was having and got me sorted.
posted by rednikki at 12:44 PM on January 30 [1 favorite]
Will I have to find all new doctors?
Note that when you shop for plans on healthcare.gov it will allow you to enter the names of the doctors and it will show you which of them are covered, along with the summary information in the resulting list of plans. Similarly for prescriptions.
And if you tell it your guess at what your spending will be this year, it can estimate your total out of pocket costs (premium + deductibles + coinsurance) and sort plans by that.
So it would be useful to plow on through the healthcare.gov application and start shopping for plans--that will answer a lot of your questions.
(Also, on CHIP: if your application shows that you might be eligible for subsidized coverage for kids, I believe it should automatically forward your information to your state.)
posted by bfields at 12:47 PM on January 30
Note that when you shop for plans on healthcare.gov it will allow you to enter the names of the doctors and it will show you which of them are covered, along with the summary information in the resulting list of plans. Similarly for prescriptions.
And if you tell it your guess at what your spending will be this year, it can estimate your total out of pocket costs (premium + deductibles + coinsurance) and sort plans by that.
So it would be useful to plow on through the healthcare.gov application and start shopping for plans--that will answer a lot of your questions.
(Also, on CHIP: if your application shows that you might be eligible for subsidized coverage for kids, I believe it should automatically forward your information to your state.)
posted by bfields at 12:47 PM on January 30
Since you mentioned dental, you should know that most marketplace plans do not include dental out of the box. I believe many of the plans have the option to add dental, but doing so can almost double the premium.
FWIW, this is pretty much true for non-marketplace plans, too. Dental has always been an expensive add-on to healthplans, which is why many employer-based plans don’t include it.
posted by Thorzdad at 4:21 AM on January 31
FWIW, this is pretty much true for non-marketplace plans, too. Dental has always been an expensive add-on to healthplans, which is why many employer-based plans don’t include it.
posted by Thorzdad at 4:21 AM on January 31
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posted by ThePinkSuperhero at 9:57 AM on January 30 [6 favorites]