I’d like to see data showing COBRA rates are cheaper than plans on the exchange. It certainly isn’t true in my experience (even without subsidies… which most people would have in retirement).
Fang, wish I could like #676 ten times.
I suppose it depends on whether your employer had Cadillac insurance. Everyone I know who went on COBRA left a high tech employer with great insurance. COBRA cost a fortune for them.
COBRA rates depend on what your employer was paying. They will be higher if your employer plan is a high coverage plan and/or your employer has less healthy than average employees (and COBRA users). They will be lower if your employer plan is a low coverage plan and/or your employer has healthier than average employees (and COBRA users). If your employer has multiple options for employees, what you chose as an employee is what you can buy through COBRA. The price of a COBRA plan for any given departing employee may be higher or lower than what s/he can find on the ACA exchange.
Of course, even if one can buy COBRA for as long as one wants, it is possible to fall off of it due to (a) moving to a location where the plan does not have in-network providers, or (b) not being able to afford the premiums.
I’ve seen numerous people on CC complain about the high cost of COBRA, as if it was somehow unfair or their employer was taking advantage of them. In reality, as ucbalumnus says, COBRA costs what your employer was paying.
I have no issue with cobra costs as they are really full pay…plus a little more than what the employer was paying for that coverage. If you are no longer an employee…then you just lose the “employer subsidy”.
Many people actually have to work until they are eligible for Medicare due to the cost of funding their health insurance themselves.
But at least they have that choice.
What about the young, self employed person. Or the younger self employed person who works several part time jobs…all without benefits. That person doesn’t have the option of cobra. They can buy individual insurance either off or on exchange. Their choice. Unfortunately, some places on,y offer one plan…therefore NO “choice” of plans.
I guess I’m happy my two kids have insurance at all. I have a very healthy 28 year old paying $375 a month for an Anthem POS plan. It was the cheapest option with coverage she needs…which is in other states too. Not eligible for a subsidy,no income. Full time professional school student.
Second kid is 32, self employed, and is grateful to have any coverage at all. He has on’ynone choice of a vendor, and he took it. No choice. His out of pocket will be $229 a month. He gets a $250 a month subsidy. Yes, without subsidy, it would have been $475 a month…and no doctors in his area even take the plan.
This is the 2017 ACA in this household!
I thought COBRA was exactly what your employer was paying.
I haven’t been able to figure out if COBRA has age bands, and if so, what they are. When Mr. Fang retired, was our COBRA plan age adjusted? I suspect so, but am not sure.
Wonder why they chose such an acronym (“POS”) that has other meanings…
There is a 2% service charge added to Cobra premium. I don’t think there would be age bands as one is simply paying the total premium cost instead of only the partial premium as an employee. One wouid still be part of the same employer group.
Cobra isn’t a plan, per se. It was an Act of Congress allowing an ex employee the right to continue on their employer’s group plan.
So then Mr. Fang’s and my COBRA was actually dirt cheap compared to the real insurance cost of people our age, even though in dollar terms it was expensive? Sounds right to me. It was lavish.
Did you compare with the cost of similar plans on the individual market (either pre-ACA or ACA)?
@thumper1 We were going to have one of those young self-employed people in our family. BFIL currently has good insurance through his job, but he’s been dreaming for a year about starting his own business. Of course, that’s now impossible without the protections of Obamacare. So another ambitious young entrepreneur is lost to the economy for no good reason, only because we tolerate this insane system where life decisions are driven by insurance.
“So then Mr. Fang’s and my COBRA was actually dirt cheap compared to the real insurance cost of people our age, even though in dollar terms it was expensive? Sounds right to me. It was lavish.”
Yes, likely.
The only difference in the group insurance coverage we get through H’s employer is by salary. Those making under a certain amount pay less - but the difference is made up by the employer. We also have many different plans (very similar to an ACA marketplace) to choose from and the premiums vary, but that has nothing do to with age.
I think this depends on the situation. Our company just passes on 102% of whatever cost is shown on the group coverage breakout for that specific employee. For an office in one state, the insurance company bills us a flat fee for a single employee and another flat fee if the employee has dependents. Doesn’t vary by age or even by the number of dependents, so COBRA costs the same to insure a married couple or a married couple with 20 kids. On the other hand, for an office in another state the insurer’s bills vary by age of the employee.
The excerpt that I posted from the article got deleted because it was too long. But for example, in the first few sentences the writer talks about how the ACA “only” caused losses of $2 Billion / year when the total profits for these companies was about $11 Billion / year. To try to pass this off as a small thing is just crazy. No mature company is going to shrug off sacrificing 20% of their aggregate profits in a market that only accounts for 4% (I’m guessing) of their revenues. Even if by some miracle they found a way to run their ACA business segment so that it returned normal industry profits, it would take them 10-15 years to recoup the losses they take if it takes them 2 years to figure it out. This is a red-alarm issue, which is probably why these companies are starting to withdraw from many markets. I suppose everything would be hunky-dory if people are ok with giving these three insurance companies $2 - $3 Billion dollars / year of Federal subsidies though. Absent subsidies, we’re probably in the death-spiral soup. Maybe the reporter has obtained a secret plan to address this from the underwear-gnomes, but if so he certainly didn’t write about it.
I’ll take your word that Larry Levitt knows what he’s talking about. But I’m guessing that you don’t regularly talk to reporters. Diamonds in, garbage out 
“I think this depends on the situation. Our company just passes on 102% of what our group coverage costs for that specific employee. For an office in one state, the insurance company bills us a flat fee for a single employee and another flat fee if the employee has dependents. Doesn’t vary by age or even by the number of dependents, so COBRA costs the same to insure a married couple or a married couple with 20 kids. On the other hand, for an office in another state the insurer’s bills vary by age of the employee. It doesn’t make too much sense if you ask me.”
Interesting. I wonder if that has to do with different states insurance regulations.
Re: the giving of billions of dollars to the insurance companies - I read today (I think in the NYT) that is a possibility to keep the insurance companies from fleeing the market during the “delay” part of repeal and replace.
Actually, they do, at least from a an actuarial perspective (per insurance actuaries). Conversely, insurance premium/costs are lower if maternity is not covered. But then, the same is true for not covering any other medical procedure or ailment.
We went off COBRA post-ACA. The individual plan we bought was considerably worse, bigger copays, bigger deductible, no dental, no vision, didn’t include one of the good local hospitals. And it was about the same price.
Well, sure, in the strange counterfactual that your insurance covers all of your health costs, but doesn’t cover all the health costs of the young people who somehow nevertheless signed up for your insurance to subsidize you. In the actual world of the ACA as it is, young people subsidize old people. Old people whining about how they would be better off if they could somehow only buy insurance that covered the ailments their age group suffers forget that young people, who, again, subsidize old people, wouldn’t buy insurance that didn’t insure them but instead siphoned off their premiums for old people. Because, Fang’s Law, they’re not idiots.
I read the article differently than you. Two billion dollars is a ton of money in the context of a $11 billion business, but it’s nothing in the context of a fifth of the US economy, which is what health care is. Assuming that the election had gone differently and the ACA was not on the chopping block, $2 billion would be a pittance to throw in to prop up the entire ACA.
I read the entire article as being in part about what actions the government could take to stabilize the market. It’s all moot now, though.
Now, the whole problem is in the lap of the new administration and the new Congress. Bwahahaha. Larry Levitt had it right when he tweeted: “There are lots of good reasons policymakers might engage in health policy. Rarely do they get political benefit out of it, though.”
Of course almost anything looks small if you divide it by the USA’s $18 Trillion GDP. I think you’re being too charitable to the author. In that section he’s saying that “insurers have to get their own act together and control costs where they can” (emphasis added). If you read the whole section you’ll see that it’s very clear that it’s not about government subsidies. Otherwise, he’d could just write “let’s give these guys a bunch of money from the Federal Treasury”.
Nevertheless, let’s think about it in the context of the Federal budget. The $2 Billion would not be enough to prop up the entire ACA. That’s for just for these 3 companies, and that’s assuming that their claims experience doesn’t continue to deteriorate. If you want to prop up the whole individual market place component of ACA, you’re probably talking more like $10 Billion in annual subsidies to the insurance industry to put a band aid on the problem for 2017. I wouldn’t be surprised if when all the smoke clears it turns out that you need $25 Billion per year to draw in enough new healthy people to actually make the exchanges permanently stable. There are currently about 11 million people in them, so about $2200 per person currently in them. It’s not necessarily crazy, but $25 Billion for a system with just 3% of the US population in it isn’t anything to scoff at either.
You’re right. Even though I’m certainly not an expert, I think that there’s a lot of evidence that the individual market place component of Obamacare is going to blow up even (or especially) if Trump / Congress does nothing. It could completely detonate in many of the country’s regional marketplaces, and it’ll take the entire individual market place, ACA or non-ACA, with it. It was going to be a mess no matter who was elected. Big hot potato. Better get the checkbook out Of course, maybe the people I talk to are just too gloomy and it’ll all turn out fine.