Some Medicare enrollment questions this year came from workers who have lost their jobs and are unsure about their health insurance options.
Here are two question that are on the minds of many Medicare-eligible Americans experiencing unemployment during a global pandemic.
I recently lost my job. Is COBRA my only health care option?
Definitely not. COBRA, short for Consolidated Omnibus Budget Reconciliation Act, is a temporary health care plan for individuals who have recently lost their jobs. Federal law requires employers with 20 or more employees to provide COBRA as a health insurance option, in order to prevent plan disruption and avoid leaving people uninsured while they look for their next opportunity.
It’s worth noting that COBRA is more expensive for the outgoing employees than employer plans, as members are required to pay 100% of the premium, a cost that normally would be shared with an employer, plus any administrative costs that come with the plan.
Having an expensive insurance plan is unequivocally better than being uninsured, particularly during a global pandemic, but it’s important to be aware that COBRA isn’t necessarily the best, or only, option.
One alternative to COBRA is getting insurance through the Health Insurance Marketplace (Obamacare). This health insurance exchange provides many health plan options for individuals to consider. In addition, government assistance is available, depending on the individual’s income, and those who are eligible can take advantage of significantly reduced or eliminated insurance premiums.
According to David Weiler, director of business development at Allsup, even those who don’t meet the requirements for assistance have the option to buy an independent health plan from a private insurance company.
If you’ve been laid off and need assistance evaluating insurance options, the best course of action is to speak with your former employer’s HR team or the third party administrator that manages your COBRA plan. These experts are well-equipped to walk you through your options and help you decide which health plan will best meet your needs.
Can I still receive COBRA benefits if I enroll in Medicare?
This can be a confusing topic because of eligibility. For example, you may be working and leave an employer with COBRA coverage, and while receiving COBRA (which can last from 18 to 36 months) then become Medicare-eligible as well.
The way that COBRA and Medicare coordinate is dependent on which form of insurance you enrolled in first. While it is possible to get COBRA if you already have Medicare, usually it is not possible to keep COBRA if you have it before you become Medicare-eligible.
If you had COBRA prior to becoming Medicare-eligible, your COBRA coverage typically ends on the date you enroll in Medicare. In that case, you should enroll when first eligible because you will not qualify for a special enrollment period for losing COBRA coverage. Your spouse and dependents, on the other hand, may keep COBRA for up to 36 months, regardless of whether or not you choose to enroll in Medicare during that time.
While you will no longer be eligible for COBRA medical coverage, you may be able to keep coverage for services that Medicare does not cover, such as dental or vision insurance. The insurance company that provides your COBRA coverage may let you drop your medical coverage and continue paying a premium for the dental coverage for as long as you are entitled to COBRA.
If you already have Medicare Part A or Part B when you become eligible for COBRA, you are entitled to enroll in COBRA as well, with Medicare as your primary insurance and COBRA as secondary. In this case, Medicare is responsible for paying the majority of your health care costs.
You can do a lot of research online, but at the end of the day, the best plan of action is to talk with a Medicare expert. Coordinating your health care benefits or making a choice about the right plan for your financial situation and health care needs can be a complicated matter. Expert help can really pay off.
Bethany Cissell is a health care insurance services specialist at Allsup.