Question: I currently have COBRA and am turning 65. Can I keep COBRA instead of Medicare?
COBRA is insurance that allows individuals to keep the insurance product they had while working. COBRA is available to purchase for 18 months and sometimes up to 36 months. The insurance policy is the same policy as you had while working, you are paying the total premium which is usually expensive. Often individuals like the COBRA policy because it is the insurance product they are used to.
Medicare Part A & B is insurance that is available to those 65 or older and those younger than 65 on Social Security Disability.
Those who are eligible for Medicare sometimes want to hold off enrolling due to the insurance products they have available to them. This is ONLY advisable if you have insurance provided by a current employer. COBRA by definition means you are no longer working. COBRA and Medicare are rarely useful at the same time.
You may be on COBRA after your employment ends, but once you are eligible for Medicare, you should enroll in Medicare A & B. This enrollment in Medicare would usually mean that you drop the COBRA coverage that you had. There are many cost effective insurance products for you to use with your Medicare that cost less than your COBRA.
If your wife wished to keep her COBRA coverage, she may be entitled to do that, I would advise reaching out to your insurance carrier and ask about the cost for that individual policy that covers your wife only.
I occasionally run into someone who delays getting into Medicare because they have COBRA. This is a serious mistake. If you miss your Initial Enrollment Period (IEP) or the Special Enrollment Period (SEP) because you left work, for getting into Medicare, you can’t enroll into Medicare A & B anytime you want. When you do join there is a premium penalty of 10% for each 12 months you were eligible to enroll and did not. This premium penalty is a penalty you pay each month for the rest of your life. Another concern is that when COBRA catches up with the fact that you should have enrolled in Medicare, they may NOT pay your full claims because they should have been secondary to Medicare. His means COBRA will not pay more than 20% of any claim because Medicare would have paid the first 80% if you had enrolled.
A related question is what about Medicare Part D, which is Prescription Drug Coverage. If you have Medicare A or B, you must have Prescriptions Drug Coverage from some source. That could be a Medicare Part D provider, an employee plan, a retiree plan, COBRA or the Veterans Administration. If you enrolled in Medicare A & B, and decided to keep your COBRA, you may not need additional drug coverage.
If you have COBRA and are close to the opportunity to enroll in Medicare please do NOT put off enrolling in Medicare. Research your options for coverage with and after Medicare. I believe you will find that your insurance costs less than COBRA, and is more comprehensive.
You could enroll in Medicare and KEEP your COBRA coverage. This is probably NOT the most cost effective coverage for most individuals. Health Care Reform and the Marketplace, means that all individuals are eligible to get Health Insurance no matter what their age or situation. So I would research the plans available to your spouse, enroll in Medicare for you and find what options you have available under Medicare.
You also may want to continue the COBRA policy due to excellent prescription drug coverage. This could be a reasonable option, but be sure to review all options for insurance before you continue your COBRA policy. You don’t necessarily need to be paying those really high COBRA premiums if there are other options available to you.
Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call us at 716-720-9797 or e-mail at SLM@lutheran-jamestown.org.