I wonder how much medicare costs would be cut if people were allowed to use COBRA?

[VandVsmama]

OK, it is fair that you feel that way, go for it.

I'm not sure if you realize it, but the tone of your reply sounds a little snarky. Perhaps you're really frustrated with your health insurance choices, which would certainly be understandable.

I am close friends with a married couple. 1 of them works full time & has health insurance covered for her through her employer. Her husband is disabled and on SSDI. HIS health insurance is not through her health insurance...he uses a Medicare health plan and, ironically, his total out-of-pocket is LESS than what it would be if his wife were to add him to HER employer-funded health insurance plan.

If his wife were to leave her job or lose her job, it would STILL be cheaper for them to have him remain on his Medicare plan than to have him get COBRA insurance through her what-would-be-then-former employer's health insurance plan.

AND the cost per month for COBRA insurance for even one of them would be so cost prohibitive that they wouldn't be able to make ends meet. They live lean as it is and with inflation + the high cost of living area they live in currently, there's not a whole lot of wiggle room for them every month.

 

[mom2rtk]

Live and let live, my question was not if anyone agrees with me and I am not interested in changing minds. Opinions are neither right nor wrong so if people like it this way, go for it.

My question was, actually right there in the original post:

I wonder how much medicare costs would be cut if people were allowed to use COBRA?​

Things got sidetracked in grilling on underlying truths which I provided via links and screenshots. My question still remains and I would love to know the answer, maybe in the age of AI it can be quickly calculated by those who have access to the data and might pop out at some point.... who knows anymore.

If savings are enough to matter on Medicare, they would be massive to medium 100 person companies. Why should your old coworkers have to bear the cost of your disability medical care when you don't even work there any more. And believe me, they would bear the costs in increased premiums.

 

[LuvOrlando]

If savings are enough to matter on Medicare, they would be massive to medium 100 person companies. Why should your old coworkers have to bear the cost of your disability medical care when you don't even work there any more. And believe me, they would bear the costs in increased premiums.

What is to stop a single employee who works for a small business from having a heart attack and costing a lot of money doing the same thing? What is to stop a young person from having an expensive pregnancy and a child that requires a lot of expensive care? There are no guarantees so pretending there are is just silly.

 

[LuvOrlando]

I'm not sure if you realize it, but the tone of your reply sounds a little snarky. Perhaps you're really frustrated with your health insurance choices, which would certainly be understandable.

I am close friends with a married couple. 1 of them works full time & has health insurance covered for her through her employer. Her husband is disabled and on SSDI. HIS health insurance is not through her health insurance...he uses a Medicare health plan and, ironically, his total out-of-pocket is LESS than what it would be if his wife were to add him to HER employer-funded health insurance plan.

If his wife were to leave her job or lose her job, it would STILL be cheaper for them to have him remain on his Medicare plan than to have him get COBRA insurance through her what-would-be-then-former employer's health insurance plan.

AND the cost per month for COBRA insurance for even one of them would be so cost prohibitive that they wouldn't be able to make ends meet. They live lean as it is and with inflation + the high cost of living area they live in currently, there's not a whole lot of wiggle room for them every month.

I'm not at all, I have been very lucky to have good coverage so I am not even remotely upset, not even a little.

I am asking a specific question and with so many posts on here there appears to not even be a single thought towards the actual question and that is just silly to me. It's like asking what's your favorite pizza and people asking if pizza is real and then talking about colors. Amused but not annoyed, I could put laugh emoji in but then that def looks sarcastic, I'm not sarcastic I am legit finding it sort of funny because why would I expect any different from the internet

 

[LuvOrlando]

I know nothing about SSDI or Medicare (other than it's available when you get to be 65). But this statement makes no sense to me, can you explain it?

If someone can't support themselves via work and relies on SSDI, where would they get the money to pay for COBRA Insurance?

OK, they do not pay for it themselves they get carried onto COBRA by family or spouse coverage just like the original coverage is extended through spouse or parent coverage.

Lets say a family of 5 has coverage with some adult in the household and either a dependant child or spouse is on SSDI with the Medicare Part A they can't refuse. If there is no Medicare involved everyone in the group slides onto COBRA with the one premium payment but because of the rules if there is a SSDI recipient everyone slides to COBRA with the exception of the person on SSDI. Then that family needs to not only pick up the COBRA but also pick Medicare plan and pay for it for the SSDI person and at the expense of taxpayers. Same thing if the insured adult chooses to work at a smaller business, regardless of how wealthy that business may be.

Everyone can have their own opinion, I just wonder if this is the best way to spend tax dollars, maybe letting people choose is sometimes better and can save taxpayer money.

 

[Marrila]

I'm not at all, I have been very lucky to have good coverage so I am not even remotely upset, not even a little.

I am asking a specific question and with so many posts on here there appears to not even be a single thought towards the actual question and that is just silly to me. It's like asking what's your favorite pizza and people asking if pizza is real and then talking about colors. Amused but not annoyed, I could put laugh emoji in but then that def looks sarcastic, I'm not sarcastic I am legit finding it sort of funny because why would I expect any different from the internet

Folks have repeatedly answered your unique concerns with accurate information.

 

[sam_gordon]

OK, they do not pay for it themselves they get carried onto COBRA by family or spouse coverage just like the original coverage is extended through spouse or parent coverage.

Lets say a family of 5 has coverage with some adult in the household and either a dependant child or spouse is on SSDI with the Medicare Part A they can't refuse. If there is no Medicare involved everyone in the group slides onto COBRA with the one premium payment but because of the rules if there is a SSDI recipient everyone slides to COBRA with the exception of the person on SSDI. Then that family needs to not only pick up the COBRA but also pick Medicare plan and pay for it for the SSDI person and at the expense of taxpayers. Same thing if the insured adult chooses to work at a smaller business, regardless of how wealthy that business may be.

Everyone can have their own opinion, I just wonder if this is the best way to spend tax dollars, maybe letting people choose is sometimes better and can save taxpayer money.

So it's only an issue when there's multiple people in a household and one is on SSDI? If so, everyone in the HH goes to COBRA, but the person on SSDI?

 

[VandVsmama]

OK, they do not pay for it themselves they get carried onto COBRA by family or spouse coverage just like the original coverage is extended through spouse or parent coverage.

Lets say a family of 5 has coverage with some adult in the household and either a dependant child or spouse is on SSDI with the Medicare Part A they can't refuse. If there is no Medicare involved everyone in the group slides onto COBRA with the one premium payment but because of the rules if there is a SSDI recipient everyone slides to COBRA with the exception of the person on SSDI. Then that family needs to not only pick up the COBRA but also pick Medicare plan and pay for it for the SSDI person and at the expense of taxpayers. Same thing if the insured adult chooses to work at a smaller business, regardless of how wealthy that business may be.

Everyone can have their own opinion, I just wonder if this is the best way to spend tax dollars, maybe letting people choose is sometimes better and can save taxpayer money.

The real life example I posted above in post #101 is an anecdotal example of a situation where what you describe is just not financially going to be possible for some people. I'd propose that, in fact, a fair number of people who have an immediate family member (i.e., spouse or child) on SSDI might not be able to afford to purchase COBRA insurance.

And if that is the case, then the answer to your question is no...allowing people to do this won't actually save the US federal government a lot of money.

Giving people choices is great. But if buying COBRA insurance is more expensive than sticking with Medicare, then the consumer is going to pick Medicare.

 

[mom2rtk]

What is to stop a single employee who works for a small business from having a heart attack and costing a lot of money doing the same thing? What is to stop a young person from having an expensive pregnancy and a child that requires a lot of expensive care? There are no guarantees so pretending there are is just silly.

Of course a single employee (or dependent) can wreak havoc on a group plan. Back when I was in group insurance, there was a school district with an employee who had premature triplets. I had to sell them on a large increase at renewal directly related to that claim. And every person in the district had to absorb the cost.

But I don't understand the argument that because this bad thing can happen, you should be OK with this other bad thing happening. One is an active employee (or dependent). The other is a former employee (or dependent) out on disability. A disability bad enough they had to quit working, so almost certain to have very high medical costs.

Allowing companies to shift the risk to the government on cases like this could even have been one of the only ways they could even get COBRA to pass and become law. I was working as a group insurance rep when COBRA became law. It was a pretty big shift. Prior to that time, employers were under no obligation at all once you left employment there (outside of retirement).

 

[lanejudy]

they do not pay for it themselves they get carried onto COBRA by family or spouse coverage just like the original coverage is extended through spouse or parent coverage.

They do pay for it -- through the family budget. I think the one aspect that has been pointed out but you seem to conveniently ignore is the cost of COBRA coverage. Say your spouse is currently paying $500/mo premiums to carry health insurance for the family. That can easily become $1500+/mo as COBRA, plus an administrative fee; and that doesn't include any outlay for actual healthcare expenses. A family who has just lost their sole income is not likely be able to afford COBRA for everyone; they may be able to reduce the COBRA if they don't cover all dependents. Many families do just that -- get the kids onto CHIP and sometimes the adult(s) do COBRA or go without.

I am asking a specific question and with so many posts on here there appears to not even be a single thought towards the actual question

You are asking a specific question but it's hypothetical with nothing to back you up. You hypothesize that healthcare would cost less on COBRA than on Medicare. How much does X, Y and Z cost with Medicare vs with COBRA? How much is paid by the insurance vs the patient? And keep in mind there are lots of different kinds of insurance as "COBRA" so the cost-sharing will vary greatly. Bring some numbers to the table, then maybe people would be willing to discuss.

Everyone can have their own opinion, I just wonder if this is the best way to spend tax dollars, maybe letting people choose is sometimes better and can save taxpayer money.

Have you even compared what your own healthcare costs might be on Medicare? I can tell you that I did exactly that comparison for a couple of years with DH. I ran figures from his actual needs and compared. Medicare has super-low reimbursement rates; it's highly unlikely to find anything that low in the private/COBRA sector. Which means the amount paying out is low even for a high-use individual.

Medicare is funded through not only taxpayer receipts but also via trust-fund interest, beneficiary premiums and general revenue.

 

[barkley]

Prior to that time, employers were under no obligation at all once you left employment there (outside of retirement).

and now more and more employers that historically offered retiree coverage are phasing it out. the government employer I worked for reaped a large number of PHENOMINAL employees from private industry as they began to age up and consider their needs for retiree healthcare. back then if you did your 5 years and were vested you were eligible then it changed to 10 years but still at a fairly reasonable premium. back 15 or so years ago they stopped offering retiree coverage to any new hires and are doing everything in their power to 'encourage' existing retirees to drop off the rolls (as in $3500 per month retiree premium for an individual/$6800 to include a spouse if you DONT have medicare a/b, $800/$1600 if you do ).

Say your spouse is currently paying $250/mo premiums to carry health insurance for the family. That can easily become $750+/mo as COBRA, plus an administrative fee; and that doesn't include any outlay for actual healthcare expenses.

yup. one of my sons left employment recently and just received the cobra notice this past week. he had the least expensive coverage offered by the employer that came with high deductable, share of cost and co-pays (basicly about $6K out of pocket per year before insurance payed anything)-cobra would cost him $893 per month (I can't imagine what it would cost for a couple) and he would still have that $6K obligation so figure before they paid dime one on anything it would cost him an average of $1393 per month for a single person.

 

[tvguy]

and now more and more employers that historically offered retiree coverage are phasing it out. the government employer I worked for reaped a large number of PHENOMINAL employees from private industry as they began to age up and consider their needs for retiree healthcare. back then if you did your 5 years and were vested you were eligible then it changed to 10 years but still at a fairly reasonable premium. back 15 or so years ago they stopped offering retiree coverage to any new hires and are doing everything in their power to 'encourage' existing retirees to drop off the rolls (as in

Health benefits are HUGE. My neighbor was a public school teacher. She retired at age 64 with 15 years with that district. 15 years earned her free health coverage for her and her husband for life, zero out of pocket expenses. He has cancer and takes $10,000 a month in medication. He just had hip replacement surgery. They opted out of Medicare. The state has threated to take over the district because the health benefits their union negotiated are bankrupting the district. Union isn't budging. But in California, politicians have little stomach for pushing back against a Union.

 

[barkley]

Health benefits are HUGE. My neighbor was a public school teacher. She retired at age 64 with 15 years with that district. 15 years earned her free health coverage for her and her husband for life, zero out of pocket expenses. He has cancer and takes $10,000 a month in medication. He just had hip replacement surgery. They opted out of Medicare. The state has threated to take over the district because the health benefits their union negotiated are bankrupting the district. Union isn't budging. But in California, politicians have little stomach for pushing back against a Union.

in many professions the appeal of those civil service retiree pensions and healthcare coverage was the factor that offset lower wages than the private sector paid for comparable jobs-many of my coworkers banked on this. our union(s) were big on negotiating for healthcare as well but over the years when push came to shove on cut-backs and phrases like 'unpaid furloughs' and 'staff reductions' were put forth they opted to agree to eliminating new hire retiree health coverage and dramatic permanant caps to employer contributions for active and retirees (as in a cap that has not risen since 2010). this is in California.

 

[tvguy]

in many professions the appeal of those civil service retiree pensions and healthcare coverage was the factor that offset lower wages than the private sector paid for comparable jobs-many of my coworkers banked on this. our union(s) were big on negotiating for healthcare as well but over the years when push came to shove on cut-backs and phrases like 'unpaid furloughs' and 'staff reductions' were put forth they opted to agree to eliminating new hire retiree health coverage and dramatic permanant caps to employer contributions for active and retirees (as in a cap that has not risen since 2010). this is in California.

Yeah, I worked in a private industry where our wages were always lower than public sector, which was why we lost so many people to the public sector. The sweet benefits are just a cherry on top. HOWEVER, public sector workers do tend to have to work in dysfunctional work places. People who aren't working out get promoted instead of fired. My son is a state worker, at his second agency, same at both. But the pay and benefits are great, so you do what state workers do, spend your career transferring from one agency to another to get away from the dysfunction.

 

[tvguy]

Allowing COBRA could reduce Medicare costs by delaying enrollment, but savings depend on various factors

Not sure that makes any sense.

From the MEDICARE WEBSITE:
"If you have COBRA and you’re eligible for Medicare but not enrolled, COBRA may only pay for a small portion of the health care services you get, and you may have to pay most of the costs yourself. Contact your COBRA plan and ask what percent they pay. "
https://www.medicare.gov/basics/get...edicare-basics/working-past-65/cobra-coverage

 

[lanejudy]

Not sure that makes any sense.

From the MEDICARE WEBSITE:
"If you have COBRA and you’re eligible for Medicare but not enrolled, COBRA may only pay for a small portion of the health care services you get, and you may have to pay most of the costs yourself. Contact your COBRA plan and ask what percent they pay. "
https://www.medicare.gov/basics/get...edicare-basics/working-past-65/cobra-coverage

Yes, but if a person is on COBRA and not on Medicare that expense is entirely on the patient with no cost to the taxpayer. So allowing people to take COBRA instead of enrolling in Medicare would potentially save taxpayer funds. I think that's OP's position as well. I'm just not sure it's a significant amount of taxpayer savings and unlikely to be the best option for the vast majority of individuals who find themselves in that situation. Also I think the red tape of paperwork to enroll in Medicare after COBRA expires, proving the timing of a "life event" (which losing COBRA is not considered a "life event") and whether or not the COBRA plan was "creditable coverage" probably all adds up to more headache for Medicare than just disallowing COBRA and requiring those individuals to enroll in Medicare.

 

[tvguy]

Yes, but if a person is on COBRA and not on Medicare that expense is entirely on the patient with no cost to the taxpayer. So allowing people to take COBRA instead of enrolling in Medicare would potentially save taxpayer funds. I think that's OP's position as well. I'm just not sure it's a significant amount of taxpayer savings and unlikely to be the best option for the vast majority of individuals who find themselves in that situation. Also I think the red tape of paperwork to enroll in Medicare after COBRA expires, proving the timing of a "life event" (which losing COBRA is not considered a "life event") and whether or not the COBRA plan was "creditable coverage" probably all adds up to more headache for Medicare than just disallowing COBRA and requiring those individuals to enroll in Medicare.

Well, I guess the Medicare money could be considered taxpayer money. The money comes from the pool of money we all paid into over our working lives, not the general fund. 1.45% of every paycheck I got for 55 years went for Medicare premiums, another 1.45% was added by my employers. With COBRA, I have to pay a premium every month, with Medicare Part A, I am just using a benefit I already paid for.
Some rainy day I will pull out my Social Security Earnings Statement and add up how much I paid into Medicare and Social Security.

 

[lanejudy]

Some rainy day I will pull out my Social Security Earnings Statement and add up how much I paid into Medicare and Social Security.

It's not likely to be close to adequate for today's healthcare expenses.
And while there are a lot more variables in social security, I'd venture to guess most people receive back more than they paid in.

 

[Mommb]

If someone with $10,000 in medical expenses uses private coverage (such as through COBRA) rather than Medicare, then Medicare won't pay those expenses. (Medicare also won't collect the premiums of roughly $185 per month from that person.) This will make a small difference to Medicare -- a cost of $10,000 spread over the tens of millions of people on Medicare comes out to an additional cost of less than a tenth of a cent per Medicare enrollee, and far less than that per taxpayer. If the COBRA coverage is tied to a small business with 20 employees, that $10,000 represents $500 per employee, which may be enough to increase costs for everyone when the policy is renewed.

So there is a small (very small) cost to taxpayers for someone to go on Medicare rather than COBRA, and a significant cost to people to pay for COBRA rather than Medicare since COBRA will almost certainly be much more than $185 per month. This added cost also affects other people if their rates rise.

Another issue is that people on Medicare are encouraged to get preventative care and frequent check-ups -- my son worked for a company whose purpose was to call Medicare Advantage clients to encourage them to get care. People using insurance through COBRA are less likely to be encouraged to seek treatment. So someone on COBRA may develop a condition that is not diagnosed when it is more treatable. Then, when the COBRA coverage expires (typically in 3 years or less), if the person goes onto Medicare, the condition may worsen and may require a higher level of treatment, and may have higher expenses, than they would have if they had been on Medicare for the past few years. This is part of the reason that people 65 and older are strongly encouraged to enroll in Medicare as soon as they are eligible -- it saves money for taxpayers in the long run if people get care before conditions worsen, and people with Medicare have lower deductibles than most people on private insurance.

 

[tvguy]

It's not likely to be close to adequate for today's healthcare expenses.
And while there are a lot more variables in social security, I'd venture to guess most people receive back more than they paid in.

Well, as I discovered when I had a procedure done 2 years ago, that what hospitals accept as full payment is a lot less than they bill. They billed $225,000. They accepted $30,000 from Medicare, and $1.200 from my Medigap insurer as full payment.
Social Security is a little easier to calculate. I put the same percentage of my paycheck into a 401k as Medicare got from me and my employer. Dividing my Social Security benefit by the total money I have in the IRA I rolled my 401k into, it will take me 16.7 years to get back what I paid in. I will have to live to 83 to get my money back. The average Social Security beneficiary gets 13 years of benefits before dying. Yes, there are people who live longer and draw more, and on the other side are the people who die before they get a penny.