COBRA vs. Obamacare: Differences in Cost and Coverage
Losing employer-sponsored health insurance is a qualifying life event that opens a Special Enrollment Period which allows you to elect new health insurance. At this stage, many start to evaluate the financial effects of various short-term plans and what they cover.
If you are looking for pre-existing condition coverage, your options for obtaining new Affordable Care Act (ACA) plans are either COBRA or through the health marketplace. Learn more about their differences regarding costs, duration and managing medical care and prescriptions.
Affordable Care Act
Obamacare Marketplace Insurance
Another option to find new ACA certified health insurance is through “the marketplace”. By using websites like HealthSherpa, individuals may compare a variety plans and enroll online.
Obtaining COBRA
One major medical insurance option is to continue your most recent employer health plan. The continuation of employer-sponsored health insurance is known as COBRA and is the same medical plan you had, but you now are responsible for the full premium.
When you stay on your plan, your insurance deductibles roll over where you left off. You may continue on your COBRA plan for a limited amount of time. COBRA is available only to workers whose current or former employer has 20 or more full-time employees on staff.
COBRA vs. Affordable Care Act
Affordable Care Act and COBRA serve different needs and are suitable for different circumstances. ACA plans, also known as Obamacare, are generally more flexible and may be more affordable, especially for those who qualify for subsidies. Whereas COBRA allows you to maintain your existing coverage but can be more costly. Both options have specific eligibility criteria and enrollment periods that must be adhered to.
Below is a comparison between these types of coverage.
Additional Benefits of Marketplace Insurance
Since the introduction of the Affordable Care Act, millions of Americans have benefitted from marketplace plans — particularly those who are unemployed, aren’t offered group health plans through their employer, have with a disability, oversee a loved one’s care or live with an pre-existing condition.
Whether you’re thinking long term or need just a couple months of coverage as you begin a new job, ACA plans:
- Have made the overall cost of insurance more affordable and simultaneously extended coverage, resulting in fewer “junk” health insurance policies.
- ]Provide a range of coverage options for people with a pre-existing health condition.
- Mean insurance companies turn away fewer individuals.
- Limit significant disparities in coverage and cost based on gender, age and health.
- Offer extended, less-limited coverage for individuals managing a chronic health condition, and policies are less likely to have payout caps.
- Make screenings and other preventative services more accessible.
- Help individuals better manage the costs of their prescription drugs.
Eligibility
- Obamacare: Open to U.S. citizens and legal residents who do not have access to affordable health insurance through an employer or a government program like Medicaid.
- COBRA: Available to employees who have lost their jobs or experienced a reduction in work hours, as well as their dependents.
Coverage Period
- Obamacare: Coverage lasts as long as you continue to pay your premiums and meet eligibility criteria.
- COBRA: Coverage generally lasts for 18 months, although it can be extended up to 36 months in certain situations.
Cost
- Obamacare: Premiums vary based on income, and subsidies are available for those who qualify.
- COBRA: Typically more expensive, as you pay both the employer and employee portions of the premium, plus an administrative fee.
Enrollment Period
- Obamacare: Enrollment is limited to the annual Open Enrollment Period or a Special Enrollment Period triggered by a qualifying life event.
- COBRA: Enrollment must occur within 60 days of losing employer-sponsored insurance.
Plan Options
- Obamacare: Offers a range of plans with varying levels of coverage and cost, from Bronze to Platinum.
- COBRA: Continues your existing employer-sponsored plan, with the same benefits and network of providers.
Provider Network
- Obamacare: Provider network depends on the plan you choose.
- COBRA: Maintains the same provider network as your previous employer-sponsored plan.
Subsidies and Tax Credits
- Obamacare: Eligible individuals may receive subsidies or tax credits to offset the cost of premiums.
- COBRA: No subsidies or tax credits are available.
Portability
- Obamacare: Coverage is not tied to employment and can be maintained if you change jobs.
- COBRA: Coverage ends if you find new employment that offers health insurance.
Application Process
- Obamacare: Application is through the Health Insurance Marketplace or state exchanges.
- COBRA: Application is through your former employer’s human resources department.
About COBRAinsurance.com, a SASid insurance company
The COBRA Insurance Website is owned by Smart and Simple Insurance Development and powered by SASid’s insurance technology. We are a nationally licensed and recognized health insurance agency looking to sincerely help people access and understand insurance. Over the past 20 years, over 4 million people have obtained insurance through SASid, Inc technologies.
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