Another COBRA work-out: Health Insurance for Boomers

We have tackled new COBRA paperwork and... find ourselves only half-done. When Tom was in a lay-off in early 2008, he became eligible for 18 months of extended insurance benefits through COBRA. His employer would pay the first 9 months, and then Tom must pay the next 9 months. That is a lucky circumstance and does not describe all lay-offs.

Lacking information about what the personal cost would be after 9 months, we continued to check out other options for Tom's health insurance, finding them all expensive. So, we were relieved to learn, just last week and a month before the payment would be due, that the next continuation cost is affordable. Tom has two choices: $270 monthly premium with a high deductible, or $550 monthly premium with co-pays similar to his current plan.

We ran comparisons for these scenarios: no health care bills during the 9 months; $3000 in bills; $25,000 in bills; and $50,000 in bills. For all circumstances except "no health care bills" the choice of plan is a wash, no difference. What does cause difference is the amount of paperwork required (more record-keeping with the high deductible plan) and, potentially, prescription drug costs. That will be our comparison point in the coming week, along with an analysis of the dental coverage.

I know this doesn't sound very complex so far but I'm ready to assign the Complexity Scale level of "a work-out" right now, on the basis of the paperwork received:

• White envelope with smallish print, matched by similar presentation on the letter. No opening line of text to identify the packet as crucial paperwork to extend COBRA benefits.
  
• Identification of the employer name was several lines of text after the start of the cover letter so the consumer must recognize the name of the processing company to know that the sender is part of the temporary health insurance coverage.
• Plan options were set as a table with few descriptors. No examples were provided.
  
• Important warnings required complete reading of the packet: consumer must reply within 10 days of the packet being sent (interesting language!) and monthly premiums have no grace period. A late payment equals a canceled policy.
  

© 2008 Mary Bold, PhD, CFLE. The content of this blog or related web sites created by Mary Bold (www.marybold.com, www.boldproductions.com, College Intern Blog) is not under any circumstances to be regarded as professional, legal, financial, or medical advice. Or education advice. Or marital advice. Or even a tip.