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Post-COBRA Coverage Choices: What Next? April 24, 2012

18 months is a long time-until the end is near. My employer-provided COBRA coverage April 30th, 2012.  I have appreciated the coverage very much, and it seems to be a relic from another time.

The main concern I used to have was how to maximize my choices in the individual insurance coverage market. Now, I am resigned to the bad choices, at least until the Supreme Court rules in June 2012. [Then it might get worse]

U.S. Supreme Court, 1998. (Photo credit: Wikipedia)

In my state there are fewer than 5 companies that offer individual coverage in my town. Not much competition there.

• Deductibles: Used to a $250-$500 annual deductible? Kiss that one goodbye. The lowest annual deductible is $750, and that will be going up this summer to $1000. I contacted the state Insurance Commissioner and that apparently is perfectly legal. The annual deductibles go up to $10,000.
• Monthly premiums: these range from $170 to more than $500 per month for one person. I know many people out there have more people to cover. How many folks do you know that didn’t even take COBRA, due to the cost?
• Co-insurance or cost-share: Used to an 8o%-20% plan where you are responsible for 20% of the covered amount? Well, that is increasingly difficult to secure as well. I’ve even seen 50/50 plans. That means the insurance covers 50% of some amount and you pay the other 50%. That is after your monthly premium. Then you have to go through the calculation of whether it applies to your deductible or not.

For example, I learned yesterday that the plan I may select would cover an MRI like this: (as a cancer survivor I have had several of these in my life)

1. Monthly premium $442
2. Current deductible $750, in July increases to $1000
3. Cost of MRI: about $2000
4. Coverage pays the first $400 only
5. The rest of the $2000 ($1600) charge would first go to my deductible of $750 if I need the MRI in the next two months.
6. Out of pocket so far in one month $442+$750, then $850 remains. I pay 20% of that $850-$170.
7. Total out-of-pocket that month = $1362

Whoa-Stay healthy for the rest of that month! Survive on reduced grocery budget! Other choice: go without coverage like many other Americans!