From COBRA to Obamacare

health care instrumentConsumers with COBRA health policies may find it worth the effort to convert to plans sold under the Affordable Care Act.

For COBRA participants, California’s Obamacare operation extended its enrollment deadline to July 15, 2014, admitting to some foul-ups in presenting options available to those with the policies.

Open enrollment for most Covered California policies closed March 31.

About 300,000 consumers in California have COBRA coverage, which comes into play after leaving a job under which health insurance was provided.

COBRA (the Consolidated Omnibus Budget Reconciliation Act) allows people who leave jobs to retain their health insurance, but they must pay the premiums. In the state of California, COBRA coverage lasts up to three years.

The main advantage in switching from a COBRA plan to an Obamacare plan would be “premium assistance and cost-sharing reductions, available only through the exchanges,” says the CEO of Covered California.

Jennifer Moore, Health Net vice president of Individual Market and Health Care Exchanges, says: “People now covered by COBRA may find comparable coverage at a lower price on Covered California.”

The move wouldn’t make sense for everyone, however, as income limitations and the extent of the available healthcare network come into play. Consumers also should check to ensure they can’t find a suitable plan at lower rates on the general private insurance market. Some people remained on COBRA because of pre-existing conditions that previously prevented them from buying insurance on the open market. That is no longer an issue under the Affordable Care Act.

Covered California has a health plan FAQ about COBRA. It warns, “It’s important to know that if you decide to drop COBRA and enroll in a Covered California plan, you cannot change your mind and go back to COBRA. If you drop COBRA, you will not be able to return to your plan.”

Covered California chief Peter Lee adds: “COBRA will continue to be a cornerstone of coverage for workers after a job loss, but it’s important for employees to know that there are options in the marketplace that could save them money.”

COBRA enrollees in some other states can buy Affordable Care Act plans for 2014 through the federal Obamacare program until July 1.