Unemployed Adults of 65 Years of Age or Older Should Sensibly Choose Between Medicare and COBRA

Choose Between Medicare and COBRA

Weighing health coverage options is essential for all and it is no different for older adults. The COVID-19 pandemic has greatly affected the job market and has left many Americans out of a job including the older employees. In January 2020, the unemployment rate among older workers was 2.6% that soared to 13.6% in April. This specifies that older Americans are missing out on their paychecks as well as the benefits clubbed with it, namely health insurance.

Health Coverage Options for Unemployed Older Adults

Older adults who have lost their job and health insurance need to immediately figure out their health coverage need so that they can quickly obtain a plan. Going without health insurance is not a wise move at all, and it is especially dangerous during a pandemic. Individuals who are less than 65 years of age have no option but to sign up for COBRA and retain their existing coverage, even though at an expensive price, or they can buy a health plan on the health insurance exchange. However, individuals who are laid-off from a job at age 65 or older get more options, as they are also eligible to sign up for Medicare. But they need to weigh the pros and cons of enrolling in Medicare and should determine whether opting for COBRA will be beneficial for them or enrolling in Medicare will make more sense to them.

Weigh the Coverage Options

Adults who see their layoff as a temporary and think they will be soon employed and get back their coverage can obtain coverage through COBRA, provided they can afford it. On signing up for COBRA, they will able to retain their existing health coverage by paying the entire cost of the plan. Most of the employers subsidize health insurance to make it affordable for employees, as they need to pay much less amount than the actual price of the plan. For instance, if $200 a month is the price that employees used to pay for health coverage, then it might be just a fraction of their plan’s monthly premium costs.

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Benefits offered under COBRA

The older adults who opt for COBRA will have the same plan of which they are used to. They will continue to pay the same copays, can see the same doctor, and can visit the same hospital. During the time of pandemic when going out and finding a new doctor and hospital is difficult, this option proves beneficial. Albeit, adults should be aware that they are allowed to retain COBRA coverage only for up to 18 months. Thus, if they think that finding a new job within that time frame, then Medicare may be a better solution. Medicare is not free but can be more affordable than COBRA. However, Medicare coverage is limited and does not include eye exams, dental care, and hearing aids.

Medicare and COBRA both have Benefits and Drawbacks

It is difficult to declare whether Medicare is best or COBRA, as both these plans have benefits and drawbacks. For some adults, Medicare might make sense whereas for some COBRA proves beneficial. For some unemployed adults, it may make sense to enroll in Medicare, as they can drop their coverage if no longer required and then re-enroll once they retire. There is no financial incentive to wait to sign up for Medicare once adults become eligible. However, if their job-based coverage doesn’t cost anything, then paying for Medicare will not make sense. But adults who lost their employer coverage will find Medicare as an affordable and better solution. Adults should carefully weigh the pros and cons of both these plans depending upon their circumstances and then pick the option that best suits them.

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