Are there alternatives to COBRA?

Many folks are waking up today with either the surprise, or the reality that they don’t have a job. The global pandemic for some has halted industry, travel, and growth for the immediate foreseeable future. It's a dramatic pause on our economic well-being for sure. If this is you and or one of your friends, then know that amidst the challenges that come with this transition also comes decisions you have to make regarding your health plan for you and your loved ones. There may be some tough decisions you have to make and this article is meant to show you other options.

If you’re are a former employee of an employer that offered you qualified coverage and you and your dependents were enrolled in that plan the day before the qualifying event, then you have the right to continue coverage on the Plan. Continuing coverage on your former employer’s plan may be the right thing to do, it may not. It just depends on your current situation. You have A LOT of options that you should consider and now is the right time to do it because some of those options are only available for a brief period of time following your termination. 

Do my spouse, kids and I all need to be on the same plan? This is also an opportunity for you to consider multiple alternatives for you and your dependents. You all don’t need to be in the same plan. You can make decisions based off what’s most financially practical and appropriate for each member of your family. As an example you can elect to stay on your employer plan for just you, your spouse could enroll in his/her own employer plan, you could enroll your kids in CHIP, or you could enroll your kid that’s in college in his/her student insurance program. Understand that there are quite a few options you have and one size does not necessarily fit all, even within your own family.

If your employer has a typical health plan through a Blue Cross, Aetna, Cigna, or UHC type plan, it’s very possible that continuing coverage on that plan could be the most expensive option and while this may be a difficult or challenging time, please note that you do have several options. 

COBRA or State Continuation– You should have received or will receive a notification from your employer about your enrollment rights and responsibilities as it pertains to maintaining your and covered dependents enrollment in the Plan. You have 60 days from the date of notification to enroll in coverage. This is a good time for your to review your options and determine the right steps for you and your covered dependents. If you want more information on your COBRA rights and responsibilities your employer should or will provide you proper notification and you can also use this link: Employees Guide to COBRA for more information.

You may be eligible for a Health Coverage Tax Credit (HCTC). Certain individuals may be eligible for a refundable Federal income tax credit that can help with qualified monthly premium payments. The HCTC pays 72.5 percent of qualified health insurance premiums, with individuals paying 27.5 percent. For more information on TAA, visit doleta.gov/tradeact/.

Spouse Plan – If your spouse’s employer offers health insurance to its employees you and the covered dependents on your plan have the right to enroll in his/her plan. In the Health Plan world your termination is known as a Qualifying Event and would allow a special enrollment period for you and your covered dependents. You will only have 30 days from the date your coverage ends with your employer to make this transition and as a result should get on this as soon as possible. 

Public Exchange – Your loss of coverage is also a Qualifying Event for a special enrollment opportunity in your local State Exchange (Obamacare, Public Option, or fill in the blank coverage). This may be a great option for you to consider as you may be eligible for an immediate premium tax credit or refundable tax credit that can be applied to the cost of the coverage. Said another way, you could receive a tax credit to help pay for the cost of coverage. One thing to keep in mind is that when you complete the application through www.healthcare.gov you should consider what you think you’ll make for the 2020 calendar year. You should keep in mind the length of anticipated unemployment or changes in your adjusted gross income. The tax credit is reconciled when you file your 2020 taxes in 2021 so if you over or under-estimate your income, just know that it will be corrected when you complete your return. Note that the plans on the Exchange typically have smaller networks than what you may have now and you’ll want to make sure that if you’re taking any type of specialty medication that it’s covered on the plan you’re looking at buying. There is a decision support tool to help you make those choices and narrow the plans that best meet your need. 

Individual Options – (Private Individual Coverage. Private Exchanges, and Temporary Coverage (Less than 365 Days) – There are plans that don’t play by the same rules as the insurance companies that are on the Public Exchange. As a result they are lower cost and may be more affordable to you and your family. There are too many to list however just know that you do have options to explore plans that can provide you interim coverage. These plans are either medically underwritten or have pre-existing limitations (or both) so make it a point to review the proposal and exclusions and limitations closely before signing up. 

Medicaid: Many people confuse Medicaid and Medicare. This is common as the programs are similar. A key difference however is that Medicare is a Federal Program and Medicaid is a State Program. Medicare eligibility is based off age and/or disability and Medicaid eligibility is based off income and financial need. 

Texas Financial Qualifications for Medicaid enrollment is shown in the grid below. The qualification will vary on more than just income and a series of check-boxes. The income requirement will vary depending on the number of people in the household and the variety of Medicare (Coverage for Children only (CHIP) or Household. 

Link to Texas Medicaid: (Click Here)

Children’s Health Insurance Program (CHIP) Coverage for just children (CHIP), or Children and single parent living in the same household and women who are pregnant will have different requirements. There are additional benefits available to Children <18, children between 18-20, and Single Mothers and Children. There are income limits for each of the programs and the best thing to do is to go to your State’s Medicaid Site and determine if you are eligible to participate. You can also apply online it’s the best way to find out if you qualify.   

Eligible individuals include:

• Women who are pregnant
• Individuals who receive Supplemental Security Income (SSI)
• Anyone who currently receives adoptive assistance
• Low-income households that have kids under the age of 19
• Link to the Texas CHIP site: (Link Here)

Student Plan (For college kids) – Most colleges have a requirement that full-time students have insurance program through their parents, on their own, or can purchase through the university. Check with your child’s university for cost and coverage options. This may be much less costly than other options and if you financially don’t qualify for CHIP could be a very easy way to get coverage for your college kids.

Medicare: For individuals over age 65 and for those with qualifying disabilities, when your employer coverage ends, you may be eligible for a special enrollment period to enroll in Medicare without a late-payment Part B penalty. Also, depending on your income, you may apply and qualify for Medicare Savings Programs that will either help offset some of the premium costs or subsidize claim costs. 

Medicare works differently than your traditional plan and as coverages are broken into the following categories:

• Part A: Inpatient Hospital, skilled nursing facility, hospice, lab tests, surgery, home health care. (Typically free to individuals >65)
• Part B: Doctors, other health care providers, and outpatient care. Durable medical equipment, home health care, and some preventive services. (You typically pay a premium for this and it’s based off earnings from two years ago.)
• Part D: Prescription Drugs

Medicare Advantage Plans: These are insurance arrangements that This is an alternative to a Medicare (Parts A, B, D) and would look more like an HMO or PPO arrangement. These are “all-in-one” products and offered by private companies approved by Medicare. If you are enrolled in one of these programs, you are still covered on a Medicare Plan, you’re just using a third-party to help you manage how you access providers and also in many cases your prescription drug benefits as well.

Direct Primary Care (DPC) – This is a physician practice model where patients and consumers pay the physician practice directly in the form of a monthly payment for a defined, yet very broad set of primary care services. DPC practices generally charge a flat monthly fee in exchange for those services. The real benefit for using a DPC provider is that there are no copayments for services that happen inside the doctors’ office. The doctor may charge for things like lab and x-rays, however they’re typically at their cost for service. An additionally huge benefit for using DPC is that the physician is very much in tune with cost and quality of other healthcare services. As a result if there is a need to have a referral to a specialist, or say you need an MRI, the Doctor will already have a network of cash pay providers that will see you at a negotiated cash pay rate. As an example an MRI would typically cost north of $1,200 within a hospital or free-standing imaging center. The same thing holds for surgery, prescription drugs, injectible drugs. Your doctor will work directly with you get and direct the care you need. 

Please note that this service does not cover major illnesses and is access to Primary Care and a Concierge type service that can help you reduce your costs of treatment significantly. It can be paired with other insurance arrangements or health share programs. 

Health Share Arrangements – This is not insurance, rather it is a health payment system whereby individuals collectively share in the cost of healthcare. Many times, health share arrangements will also provide support with medical bill negotiation, second surgical opinions, medical bill negotiation, and care advocacy/navigation as a part of the services offered.  Instead of paying monthly premiums, members pay a monthly share that can be drawn from community funds as medical needs arise. Typically the share amounts are much lower than insurance premiums and in many cases can be 50% lower.  

What is great about these arrangements is that the medical share amounts are much more manageable than a typical health plan. Most affordable insurance products have a very high deductible and are beholden to insurance company network arrangements. Typically providers will give a much better deal for folks that are paying cash than those that have insurance. As a result the amount you pay out your pocket is much less. There is also out-of-pocket protection through a health share arrangement but it’s just a different model than what you may be familiar with your current health plan. The savings and support are such that it makes sense to consider this as a replacement, just remember though that it’s not insurance and it’s not designed to cover every little sniffle and doctors office visit. It’s a fantastic way to protect yourself in the event the unknown and unthinkable happen.  There are pre-existing condition limits that improve the longer you’re on the plan. Just because you may have had a condition, doesn’t mean you should rule this out. You just need to understand what’s shared and what’s not eligible for a share before making a purchasing decision. If you have diabetes or take high cost medications however this may not be the plan for you. 

Federally Qualified Health Centers (FQHC) Community-based health care providers that receive funds from the Health Resources & Services Administration (HRSA). Their role in serving the community is to provide primary care services to those with financial need and/or in underserved areas. In order to be considered an FQHC they must qualify based off a stringent set of requirements. While this is subsidized and very effective care, it is not an insurance plan and not all services are covered through an FQHC. 

Health services are open and available to all. For individuals that qualify, health services are charged on a sliding fee scale based on ability to pay.  If you are not able to afford insurance, or if you have a deductible that’s way too high for you, then consider finding an FQHC near you. They will be able to work with you and even if you have insurance they may still be able to provide free primary care services based off your own situation. They also have tremendous access to local resources and may be able to help with food, medication, and other areas that are affecting of compromising your health.

For more than 50 years, community health centers have delivered comprehensive, high-quality preventive and primary health care to patients regardless of their ability to pay. Today there are nearly 1,400 health centers, which operate approximately 12,000 delivery sites, across the country serving over 28 million people.

The great thing about FQHC’s is that they generally have and meet some of the highest standards of care. As an example,

·       93% of health centers met or exceeded Healthy People 2020 goals for one or more clinical measures,

·       99% of health centers and improved on one or more clinical quality measure.

·       67% of health center patients with diabetes controlled their blood sugar levels (HbA1c ≤ 9%), exceeding the national average of 60% (National Committee for Quality Assurance, The State of Health Care Quality. Diabetes Care, 2017).

·       63% of health center patients with hypertension controlled their blood pressure, exceeding the national average of 57% (National Committee for Quality Assurance, The State of Health Care Quality. Controlling for High Blood Pressure, 2017).

FQHC’s have been around for over 50 years and drive health improvement, health promotion and improve the health of millions of people in communities across the nations. 

Link to find an FQHC near you. (Link Here) -

Additional Resources: There are a lot of options that you have as an individual to protect yourself and your family. Note with each of these programs may come additional considerations. You should want to know a few things about each option:

• What’s covered under the program?
• How does the program work? (Healthshare and Medicare typically work differently than a traditional HMO/PPO arrangement.)
• Are there any pre-existing condition limitations?
• Is coverage guarantee issue or is it underwritten? If underwritten, what’s the length of time before coverage is bound?

If this is at all confusing and you’d like some help, feel free to reach out to me directly for help and to review your options.  

Contact: Michael Andrade

Phone: (832) 236-8966

Email: [email protected]