If I'd already paid five months of deductible expenses, should I elect for COBRA or buy my own insurance if there's only a $30 difference between the two?
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1Which provides better coverage? They are just 2 options for buying medical insurance. The reason employers are obliged to give COBRA is to avoid a "coverage cliff" situation, where you're mid-treatment and suddenly forced to a new plan that doesn't support that doctor and treatment, so you must now reboot with a new doctor and lesser treatment. But then, your COBRA will forcibly end in a year; you also don't want to get sick and have a cliff then.– Harper - Reinstate MonicaMay 31, 2019 at 20:29
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Also might be good to keep in mind that when if you switch plans mid-year your deductible will get reset.– KevinMay 31, 2019 at 20:52
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do you know when the insurance for the next employer will start? when did the coverage for your employer end?– mhoran_psprepMay 31, 2019 at 21:45
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Coverage for prior employer ended today. I have another 60 days to elect COBRA. I'm now self-employed.– NZRMay 31, 2019 at 22:58
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2 Answers
This is kind of a subjective question but there are some common factors to consider.
- Is the coverage overall better on the private plan. In many (but not all) cases they are less coverage unless you get a higher plan on the market exchanges.
- What is the deductible on the private plan compared to what you have remaining on your COBRA plan? If the deductible remaining on your COBRA is greater than the full deductible on the private plan then it might make sense to go to the private plan. However, if the private plan is higher than the remaining on your COBRA you need to factor in that you will have paid all of the COBRA deductible and will not get credit for it in the private plan.
Ultimately it is a numbers game. You will also want to check that the private insurance has the same network coverage. In other words, you want to make sure you can keep your doctors if that is something that is important to you.
Finally, you not only want to pay attention to the deductible, but you want to compare the max out of pocket overall because that will reset as well.
@DavidTaylor's answer covers good considerations when comparing the two plans. If you compare those factors and all else is equal, and you've already paid against accumulators in your current plan, COBRA coverage is the best bet since you won't have to start over in terms of paying towards your deductible and max out of pocket.
But, that said - in a comment you clarified,
Coverage for prior employer ended today. I have another 60 days to elect COBRA. I'm now self-employed.
It's important to note that COBRA can be elected retroactively. So, for people who do not have known, imminent medical expenses, the best plan may be to not elect any coverage, and wait to see what happens. If you find yourself with a medical issue during your election window and the cost of the services you need are greater than what your COBRA premium plus your out of pocket cost under that coverage would be, you can retroactively elect the COBRA option, pay the premiums to date, and take advantage of the coverage. But if you never need it, you never pay for it. You're allowed 60 days from the date you receive your COBRA notification to elect coverage, and another 45 days to make your premium payment, so you have significant runway during which to make this decision and incur the premium cost.
Since you mentioned you'll be self-employed from now on, it's clear that COBRA cannot take care of your needs permanently, since it's limited in duration once you do elect it. So, ultimately, you'll need to obtain other coverage if you want health insurance - but, as long as you understand the timelines for election, you can choose to float without coverage in the near future and potentially save the cost of the premium until you settle on your final plan, without any risk of incurring costs that are not covered.
