I recently quit teaching. I taught for three years in Nashville Public Schools--long story short, I didn't love it--and now I'm back to my previous job as a self-employed business writer. The scariest thing about quitting teaching is losing great health coverage and having to buy my own insurance again. Anyone who's had to buy their own insurance knows the confusion and stress of the process. If you don't, you can experience it vicariously through me. Join me, won't you?
I'm looking forward (with some trepidation) to October, when I'll be able to buy health insurance through an exchange. In the mean time, I have to figure out how to get my family covered from September through December of this year. I've just begun my journey.
Here are the options available currently:
1. COBRA. I can continue my current insurance with Cigna through COBRA. However, the coverage is so good that it will cost more than $1,500 per month (PER MONTH!) to keep the coverage. I am guaranteed coverage through COBRA as long as I pay for it. However, I cannot sign up for it until I receive an offer from my employer. They told me that they have 45 days to get the offer to me (which would be October 15!), meaning I'm in limbo until then. If I choose COBRA coverage, it will be retroactive to September 1 as long as I pay the full premium due from that date. I could just plan on getting coverage through COBRA for the rest of the year, but that would eat up our emergency savings, which I'm counting on as I restart my business.
2. Individual health coverage with underwriting. Underwriting is the dirty word of health insurance coverage. You can look through any site and see their "estimates" for monthly premiums, but nothing is set in stone until the underwriters take a look. And by "take a look," I mean examine your entire life's worth of health records for anything that looks like it will cost the insurance company money. Once they find something, they will either set the rates higher than the published pricing or they will give you a rider, which means you will never be covered for a particular illness. Had a mole removed in 1979? No coverage for melanoma. Had a colonoscopy before you were 50? No coverage for colon cancer. An astounding real-life example from our own experience was when my husband had a sonogram to check his thyroid. He ended up having a rider for goiter from our next insurance carrier. Goiter? Really? Anyway, published prices for individual coverage for our family run from $300 per month ($22,000 family deductible!) to more than $1,200 per month ($3,000 family deductible)...if we qualify! At our ages (61 and 52, with a 13-year-old daughter), we will most likely have to get insurance physicals and blood tests as part of the application process. And, with all of these policies, the no pre-existing condition rule is in place for the first year because most of these plans are grandfathered. They are not subject to the ACA's rule on no pre-existing conditions.
3. Short-term insurance. This coverage is high-deductible with no pre-existing conditions for a limited number of months. This is a viable alternative because it would probably cost no more than $1,500 for the entire four months. However, that means no doctor's visits for any current illnesses unless we want to pay the full published charge or visit a clinic. This coverage is primarily for accidents and medical emergencies. However, it's unclear to me how the pre-existing conditions clause would work for emergencies. My husband is on cholesterol medication. If he had a heart attack while under a short-term plan (knock on wood, he's never had any heart problems), would his high cholesterol be considered a pre-existing condition leading to a heart attack? What kind of financial nightmares would be possible with this type of coverage. The unknowns scare me the most.
4. Go without insurance. This is actually not a bad option. With COBRA, I have 60 days after receiving the letter from my past employer to decide whether to continue coverage retroactive to September 1. And I can elect coverage for the entire family or just the person who needs it (reducing the premium to $666). I could wait it out until the last few days (the earliest being October 30 and the latest being December 15 depending on when I receive the notice), and if we haven't had to use it, just don't get it. Then I could do the short-term plan for the last month or so before the ACA plans kick in. This is a little scary, but it may be the best option. If you can think of others, please speak up in the comments.
I don't have to decide until the end of August, but we're leaning toward some combination of COBRA and short-term insurance to get us through to January 1. Of course, who knows how smooth the move to Obamacare will be. The early predictions are not good, but I'm hopeful. I live in Tennessee, so I'll be looking at the national exchanges. I'll keep you posted.