If you are leaving your job, along with your health insurance, you can get insurance through COBRA. But, should you get COBRA? Your state health insurance exchange is now another way to get health insurance if you don’t get it through work. And, it will likely be a far less costly option. But, it may not offer as good benefits.
What does COBRA do? COBRA allows workers and their spouses and dependents to keep their health insurance coverage from their jobs for 18 to 36 months, so long as the workers pay the full premium. (Often employers charge an additional 3 percent for administrative costs.) COBRA offers a great protection for people leaving their jobs who don’t want to give up good insurance. The biggest problem with it for most people, however, is that the full cost of health insurance can be unaffordable.
COBRA protection is usually available to people who work in companies with 20 or more employees, generally including people who work for state and local governments, but excluding people who work for the federal government. People with costly health care needs benefit most greatly from COBRA since it tends not to be possible to buy individual coverage that is as generous as what insurers offer in the marketplace. And, when that good coverage is available it tends to be even more costly than the cost through COBRA.
Even if you have COBRA, you should sign up for Medicare once you become eligible for it. Medicare becomes your primary insurance. If you have costly health care needs, COBRA can become your secondary insurer; it may cover services that Medicare does not cover. (Note: If you do not sign up for Medicare when you become eligible, you will likely end up without any coverage since your COBRA coverage will no longer be primary.)
For more information, visit Medicare Interactive.