ACA vs COBRA

[ileo73]

My job lost its funding so my benefits go away end of August.

My thinking, which I present her for reality checking:

Cobra would cost me 975 a month but I keep my existing coverage including a $200 deductible.

ACA would be 558 but the deductible is 6000.

My hunch is that at least for the next few month until open enrollment, Cobra is better way to go, I'd reconsider ACA in December if I didn't have new job lined up.

But this is based on my limited perspective and understanding. If anyone has better information or real experience, please feel free to set me straight.

[Shamrock4806]

Your reasoning is plausible, but it misses a few important factors.

The biggest one is that losing employer coverage triggers a Special Enrollment Period, so you do not have to wait until December to switch to an ACA plan. In most cases, you have about 60 days before or after your employer coverage ends to enroll, and if you choose COBRA first, you may still be able to switch to an ACA plan during that Special Enrollment Period. Once that window closes, however, you generally cannot switch until the next Open Enrollment unless another qualifying event occurs.

Other things to consider:

Expected medical usage. If you expect surgeries, specialist visits, expensive medications, or frequent care over the next few months, COBRA's higher premium may be worth it because of the much lower deductible and continuity of coverage.

Network and providers. COBRA lets you keep your current doctors and prescriptions. An ACA plan may have a different network.

Total cost, not just deductible. Compare:

Monthly premiums.

Deductible.

Out-of-pocket maximum.

Copays and coinsurance.


Subsidies. If your income drops because you're unemployed, your ACA premium could end up being significantly lower than $558/month due to premium tax credits. Make sure that quote reflects your expected annual income rather than your previous salary.

One correction to your plan: you don't necessarily need to wait until Open Enrollment to move from COBRA to an ACA plan—you may have a Special Enrollment Period after losing your employer coverage. Whether switching later is possible depends on the timing, so don't assume you'll have that option indefinitely. -ChatGPT


You can also look at this way, the cost difference between the two plans is a whopping $417 a month which if saved is 14 months to approximately $5800 then after that get to keep the $417 a month as you already have the deductible saved up.

The problem is I found is with a high deductible I tend to avoid necessary doctor visits on account I'm trying to save money, but if blowing it anyway with an extra $417 I'm going to be seeing them as much as possible.

I would switch to using an ACA plan until you get rehired and on a new company plan.

A word of warning though, my ACA plan doubled every year. First it was $83 a month for full coverage (hey I'm poor) then it went up to slightly over $200 a month and the third year until I was up on Medicare (with Advantage) it was $420 a month. But I've gotten some REALLY GOOD care with my ACA plan. A complete cancer evaluation and hospital stay that cost $80k and I paid nothing.

Now my Medicare Advantage Plan is completely paid out of my SSDI but I do have a $1200 deductible and copays. But after I think $6000 max out of pocket I pay nothing. But good cancer places won't take it. But oh well I don't want treatment or anymore surgery anyway. Once was enough.