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Question: I am currently working, but will be retiring. I will need COBRA insurance until I turn 65. My wife has Medicare Part A with Social Security Disability. How does COBRA impact my wife’s insurance coverage?

Answer: The Consolidated Omnibus Budget Reconciliation Act (COBRA) is insurance that allows individuals to keep the insurance product they had while they were working. COBRA is available for purchase for 18 months and sometimes up to 36 months. The insurance policy is the same as the one you had when you worked, you pay the entire insurance premium without the help of your former employer. Often, individuals like the COBRA policy because it’s the insurance product they’re used to.

Original Medicare Part A & B is insurance available to people age 65 or older and people under age 65 with a Social Security disability.

Those who are eligible for Medicare sometimes wish to delay enrollment due to other insurance product options available to them. This is ONLY advised if you have insurance provided by a current employer. COBRA by definition means you are no longer working. COBRA and Medicare are rarely helpful at the same time.

You can be on COBRA after your job ends, but once you are eligible for Medicare, you must enroll in Medicare A & B. For you, enrolling in Medicare would mean you are off COBRA. There are many cost-effective insurance products you can use with your health insurance that will cost less than your COBRA.

Your wife has a different situation. She currently has Medicare Part A and coverage from your current employer. She will need to enroll in Medicare Part B and find additional coverage after your job ends. In his situation, COBRA is not the best option. Once enrolled in Medicare Part B, she will have many other options available to her. Its coverage would be Medicare Part A & B plus other products that include prescription drug coverage. His coverage would be individual coverage only. So you and your wife will have different insurance coverage.

I sometimes meet someone who delays entering Medicare because they have COBRA. This is a serious mistake. If you miss your Initial Enrollment Period (IEP) or Special Enrollment Period (SEP) because you left your job to enter Medicare, you cannot enroll in Medicare A&B at any time. When you join, there is a 10% premium penalty for each 12 month period you were eligible and did not. This premium penalty is a penalty you pay every month for the rest of your life. Another concern is that when COBRA realizes that you should have enrolled in Medicare, they may NOT pay all of your claims because they should have been secondary to Medicare. In this situation, COBRA will pay no more than 20% of any claim, as Medicare would have paid the first 80% had you been 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 prescription drug coverage. Coverage can be a Medicare Part D provider, employee plan, retiree plan, COBRA, or Veterans Administration.

If you have COBRA and are about to enroll in Medicare, please do NOT defer enrolling in Medicare. Research your Medicare coverage options. You can enroll in Medicare Part A & B and KEEP your COBRA coverage. This is probably NOT the most cost effective coverage for most individuals.

Health care reform and the market mean that all individuals are eligible for health insurance, regardless of age or status. Be sure to review all options (like the Affordable Care Act) for insurance before deciding to keep your COBRA policy. You don’t necessarily need to pay those very high COBRA premiums if there are other options available to you. To speak with someone about Affordable Care Act plans, I recommend seeking out a certified navigator. Locally, Tina Lewis is an NYS of Health Certified Navigator. Tina can be reached at Neighborhood Legal Services Inc. in Jamestown at 716-525-6083 or [email protected]

Senior Life Matters is a community program sponsored by Lutheran Jamestown. For questions or concerns or to reach Janell Sluga, GCMC, call 716-720-9797 or email [email protected]

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