Tapped out in Kentucky, cont.

Yesterday, I took a look at what induced David Elson, a 60 year-old advanced diabetic in Louisville, Kentucky earning $28,000 "in a good year,", to sign up for an ACA health plan with a $350 monthly premium. At that income level (which was almost surely overstated), a benchmark silver plan would have cost him about $180 per month. His tale has been recounted in depth twice by Abby Goodnough in The New York Times.

Why sign up for a plan that cost twice as much as the benchmark? The short answer was that Mr. Elson was trying to keep his doctors -- most importantly, his kidney specialist. That locked him into just one provider, Anthem Blue Cross, and the high premium plan he chose was an alternative to cheaper Anthem plans with higher deductibles and copay-coinsurance combinations that may have cost him more. The problem was that it was always obvious that he could not afford that premium -- one of his providers said as much in Goodnough's March 2014 article -- and he never paid it. His kidneys failed this fall, and he ended up first in charity care and then -- as of today, Jan. 1 -- on Medicare.

As I pointed out yesterday, not only an alternative silver plan offered by another insurer but even a handful of gold and platinum plans with lower premiums and deductibles than the one he selected were available to Mr. Elson in 2014. Trying to keep his doctors came at a price he could not pay.

Today I want to look at one more factor that framed the choices faced by Mr. Elson -- prompted once again by commenter Bob Hertz. That's age-rating.

Switching from COBRA to the ACA exchanges

I know a couple of people who will likely save a good deal of money by switching from COBRA to health plans available on ACA exchanges. It strikes me that people making this transition are an important subset of those who may stand to benefit from the ACA.  I'd like to invite people who have made this switch or are considering it to contact me via the "about me" tab on the right margin of this blog.

COBRA, the Consolidated Omnibus Budget Reconciliation Act, first passed in 1986, is best known for allowing people who lose or quit a job to continue on the former employer's group health plan for a fixed period (usually 18 months; 36 months in case of divorce) without the benefit of the employer's contribution.  It can also be tapped by people recently divorced or widowed or whose spouses become eligible for Medicare. An FAQ about eligibility and rules is provided by the Dept. of Labor, here.

Employer-sponsored insurance (ESI) usually provides more expansive coverage than the silver plans that are the benchmark in ACA exchanges -- though that may not be the case for people who qualify for additional subsidies reducing out-of-pocket expenses. But ESI is expensive. People whose income qualifies them for relatively modest ACA subsidies, or no subsidy at all, may have to balance tradeoffs when deciding between COBRA and an ACA plan. Below, in brief, with first-name pseudonyms, are outlines of the two situations I'm familiar with.