Question: I will turn 65, so can I keep COBRA insurance, which also covers my wife, and not start Medicare?

Answer: The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is insurance that allows individuals to keep the insurance product they had while working. COBRA is available to purchase for 18 months and sometimes up to 36 months. The insurance policy is the same policy as you had while working, you are paying the total premium which is usually expensive.

Medicare Part A & B is insurance that is available to those 65 or older and those younger than 65 on Social Security Disability.

Those who are eligible for Medicare sometimes want to hold off enrolling due to the insurance products they have available to them. This is only advisable if you have insurance provided by a current employer. COBRA by definition means you are no longer working. COBRA and Medicare are rarely useful at the same time.

You may be on COBRA after your employment ends, but once you are eligible for Medicare, you should enroll in it. This enrollment in Medicare would usually mean that you drop the COBRA coverage. There are many cost-effective insurance products for you to use with your Medicare.

If your wife wishes to keep her COBRA coverage, she can. Ask your insurance carrier about the cost for an individual policy that covers only your wife.

It is a serious mistake for people to delay getting into Medicare because they have COBRA. If you miss your Initial Enrollment Period (IEP) or the Special Enrollment Period (SEP) because you left work, for getting into Medicare, you can’t enroll into Medicare anytime you want. When you do join there is a premium penalty of 10% for each 12 months you were eligible to enroll and did not. This premium penalty is paid each month for the rest of your life. When COBRA catches that you should have enrolled in Medicare, your full claims may not be paid because they should have been secondary to Medicare. This means COBRA will not pay more than 20% of any claim because Medicare would have paid the first 80% if you had enrolled.

If you have Medicare A or B, you must have Part D, Prescriptions Drug Coverage from some source. That could be a Medicare Part D provider, an employee plan, a retiree plan, COBRA or the Veterans Administration. If you enrolled in Medicare A & B, and decided to keep your COBRA, you may not need additional drug coverage.

If you have COBRA and are close to the Medicare enrollment date, don’t put off enrolling in Medicare. Research your options for coverage with and after Medicare. I believe you will find that your insurance costs less than COBRA, and is more comprehensive.

You could enroll in Medicare and keep your COBRA coverage. This is probably not the most cost effective coverage for most people. Health Care Reform and the Marketplace, means that all individuals are eligible to get health insurance no matter what their age or situation. So I would research the plans available to your spouse, enroll in Medicare for you and find what options you have available under Medicare.

You also may want to continue the COBRA policy due to excellent prescription drug coverage. This could be a reasonable option, but be sure to review all options for insurance before you continue your COBRA policy. You don’t necessarily need to be paying those really high COBRA premiums if there are other options available to you.

Senior Life Matters is a community based program sponsored by Lutheran Jamestown. For questions and concerns or to reach Janell Sluga, GCMC, call us at 716-720-9797 or e-mail at SLM@lutheran-jamestown.org.