ACA vs COBRA: provider network decisions

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
fast_and_curious
Posts: 111
Joined: Fri May 16, 2014 12:07 pm

ACA vs COBRA: provider network decisions

Post by fast_and_curious »

Hello Bogleheads,

At the end of this year I am planning to leave my current job, for at least a "trial run" at early retirement (meaning taking a few years off until the kids get through high school, and then will re-evaluate based on market conditions & boredom whether it makes sense to go back to work :happy ). Which means that for 2022 and part of 2023, we'll have the option of COBRA from my current job, or ACA coverage.

The ACA premiums will be _much_ less expensive because of subsidies assuming we manage our taxable income well (which seems pretty easy). So, on the face of it, ACA would be my preference. Likely about a $1500/mo difference between ACA and COBRA premiums.

But the "in-network" provider networks, at least in my area, are VERY limited on all ACA marketplace plans, with most having no coverage at all for out-of-network. And for the last number of decades I've had typical megacorp group insurance that covers many/most providers nationwide. So, I'm trying to understand what this difference means in practice, and how to select the coverage (i.e. provider network) we'd want to go with, if we go with ACA. Some comments / questions:
  • It's pretty obvious that for routine checkups and preventative healthcase, my family and I would have to go to providers in the "in-network" list, or else be prepared to pay cash prices (and not file with insurance) for out-of-network providers. (For example, my kids' pediatrician is not "in-network" with many of the policies, but since we just have a few years left before they leave for college, and they have no major chronic health conditions, maybe we just choose to pay out-of-pocket for the small number of routine office visits so they can keep their pediatrician.) This is an inconvenience but not a major one, and is well understood.
  • If we are traveling (vacation, etc.) outside of our area, where there are no in-network providers, that's probably okay - the only coverage we'd typically use on a trip would be emergency coverage (i.e. major car accident, taken to ER), which I believe is covered at in-network rates by all ACA plans.
  • When the kids go off to college, if they attend away from home, is the idea to purchase student insurance coverage through their university, and drop them from the ACA plan, so that they can seek non-emergency care on/near campus? But what if they want to see a doctor when home for summer/winter breaks? So maybe keep them on the family ACA plan _and also_ purchase student coverage? Not sure how that would impact the ACA subsidy or if that's even allowed? Or just choose to pay out of pocket if/when they need non-emergency care away from school/home, depending which plan they are on?
  • My biggest concern would be if, God-forbid, one of us is diagnosed with a critical condition which requires specialty care - a specific type of cancer, perhaps, or specific neurological condition or whatever, where we'd want to be treated at a specialty medical center with expertise in that specific condition (without knowing a priori, of course, what the condition is!). Is it correct that this is the major drawback of tiny provider networks?
This last point makes me think the wise choice might be to pick the ACA coverage that includes a major university medical center in the area (who presumably has at least reasonable expertise in many specific critical conditions), even if that means we all have to switch our primary care doctors. As opposed to selecting a plan that covers more of our primary care doctors, but only the local/regional hospital network, and not the nearby university med center. Still confused about kids' coverage at school (more confusing because my HS senior won't have made a college decision by the time I need to make the health insurance decision, and my other kid still has a couple years to go before college.)

Or of course, I could bite the bullet and pay for COBRA which will allow me to postpone this decision for 18 months. :happy

Am I thinking about this the right way? Interested in anyone with first-hand experience with these issues, or who has gone down a similar decision path.

Thanks as always!
PaunchyPirate
Posts: 1163
Joined: Sun Nov 30, 2014 6:58 pm

Re: ACA vs COBRA: provider network decisions

Post by PaunchyPirate »

You're exactly thinking the right way. It truly is a major decision. One issue with many ACA plans is this narrow network of providers. So it becomes a bit of a roll of the dice to hope you don't need to see a provider that is not in your network. Only you can make the decision on your risk tolerance. But it seems you are thinking of the correct things.

I don't have any experience with the college student aspect of this to comment. I would probably be looking at those plans now -- call a possible university and ask for documentation. You need to find out what their network limitations are in advance to answer the question about if they are covered while home on winter break.

For me personally, I purchased a more expensive gold PPO plan for my first year on the ACA. But with subsidy, it was still half the price my COBRA was going to be. For year 2, the providers in my county stopped offering PPOs. I was stuck. So I have been on an HMO plan (with no out-of-network coverage) for 2021. I'm not pleased, but if I want ACA subsidies, I don't have a choice. I can pay full price off the ACA exchange if I want a PPO, however. So it became a roll of dice when I made the decision to go with the HMO. Fortunately, I don't think I'll have any issues, as I don't plan any further travel for the rest of this year.

When out of network, one of my concerns is who gets to make the decision on what "emergency care" really means. Pretty sure an ER visit is covered (as much as the policy covers that -- i.e. copays, etc.). But if you are then admitted for further treatment, someone has to decide when that is still an emergency. And I don't think it is the patient that gets to decide this.

For 2022, Pennsylvania's ACA exchange isn't yet open, of course. BUT, the providers have proposed their plans and rates to the state and this information is published on the state website. So I've looked through the documents and, luckily for me, it seems that one of the providers is again going to offer a PPO plan (which should mean some level of out-of-network coverage). It will be in the gold level only. But I will pay for that again to get this extra coverage. I hope to travel much more in 2022 if possible and will feel more comfortable having this coverage. Fortunately, the new increased ACA subsidies apply in 2022 again, so that will help.

You're thinking properly. Get more info about options for how your kids will be covered. Then roll your dice.
talzara
Posts: 4745
Joined: Thu Feb 12, 2009 6:40 pm

Re: ACA vs COBRA: provider network decisions

Post by talzara »

fast_and_curious wrote: Sun Sep 26, 2021 9:58 am
  • When the kids go off to college, if they attend away from home, is the idea to purchase student insurance coverage through their university, and drop them from the ACA plan, so that they can seek non-emergency care on/near campus? But what if they want to see a doctor when home for summer/winter breaks? So maybe keep them on the family ACA plan _and also_ purchase student coverage? Not sure how that would impact the ACA subsidy or if that's even allowed? Or just choose to pay out of pocket if/when they need non-emergency care away from school/home, depending which plan they are on?
Student insurance usually costs much less than the ACA policies. The university can insure its students as a group, so they can be priced on their lower consumption of healthcare. The ACA age curve is compressed, so 18-year-olds pay more to subsidize the 64-year-olds.

Blue Cross could be a good option for college students in many states. Away From Home Care offers a guest membership in a sister Blue Cross company for people living in the sister company's territory for at least 90 days. To get this coverage, be sure that both companies participate in AFHC, and look for the AFHC feature in the plan you purchase. You can buy the Blue Cross plan in your home state and get a guest membership in the state where your child is going to college, or the other way around. The guest membership provides different coverage than the in-territory plans, so don't just shop on price.
fast_and_curious wrote: Sun Sep 26, 2021 9:58 am Still confused about kids' coverage at school (more confusing because my HS senior won't have made a college decision by the time I need to make the health insurance decision, and my other kid still has a couple years to go before college.)
You can switch plans when the child goes to college. Moving to a different state qualifies as a special enrollment period.
AQ
Posts: 885
Joined: Mon Feb 25, 2008 10:38 pm

Re: ACA vs COBRA: provider network decisions

Post by AQ »

Thanks for the thread since I"m in a similar situation. One post above seems implying that one could get a 'full-fledged' PPO plan from ACA if only we don't get subsidy, is that correct?
PaunchyPirate
Posts: 1163
Joined: Sun Nov 30, 2014 6:58 pm

Re: ACA vs COBRA: provider network decisions

Post by PaunchyPirate »

AQ wrote: Sun Sep 26, 2021 1:14 pm Thanks for the thread since I"m in a similar situation. One post above seems implying that one could get a 'full-fledged' PPO plan from ACA if only we don't get subsidy, is that correct?
Maybe. It is entirely up to the insurance providers what they offer on the exchanges (either healthcare.gov or a state-run exchange). And it varies at the zip code level. So an insurance company may decide to sell no PPOs on the exchange. Or they may choose to sell them on the exchange, but only at the more expensive levels. If it’s ON the exchange, subsidies would apply if the consumer qualifies. Even for a PPO.

What I was referring to in the previous post was that, in my county for 2021, no insurance carrier offered a PPO on the exchange. But they offer PPOs off the exchange. I could get a PPO, but I had to call the company directly or sign up via their website — not the ACA exchange. The gotcha is that you can only get a subsidy if you purchase ON the exchange. So I could have had a PPO, but I would have to pay full price for it. Quite expensive.
User avatar
beyou
Posts: 6915
Joined: Sat Feb 27, 2010 2:57 pm
Location: If you can make it there

Re: ACA vs COBRA: provider network decisions

Post by beyou »

Facing same COBRA vs ACA soon.
My spouse was treated for cancer at a major well know cancer research hospital. ACA plans in our area do not cover that hospital. COBRA will. Guess what we’re going with. The network is a major part of what you get, don’t discount that. Check which area hospitals are included, that is where the big costs can come from if your chosen hospital is out of network.

I fact when COBRA runs out, one of us may work of we can get better coverage than ACA.
Tea4Two
Posts: 38
Joined: Thu May 07, 2020 3:16 pm

Re: ACA vs COBRA: provider network decisions

Post by Tea4Two »

Dear Fast and Curious:

I can’t say what’s best for you, but here’s our story:

During unemployment mid-year 2020, my DH (dear husband) and I passed up an option for COBRA and were (after hours of online searching) on what seemed the best ACA plan we could find in Arizona.

The insurance company was called AmBetter.

The monthly premium was over $1600 per month.

The annual deductible for the two of us: $13,000.

And, … our doctors DO NOT accept this plan.

In fact, in Arizona, individual policies from companies that our doctors do accept—Aetna, Blue Cross/Blue Shield, Cigna— are simply. not. available.

So, while we could see our regular doctors and afford to pay cash for, say, an annual check up, even the remote possibility of incurring an emergency or a major health problem would mean scrambling to find a doctor who would accept AmBetter.

Also, working with the ACA and AmBetter was very difficult, to say the least.

The fact that we qualified for a government subsidy was not a comfort. For us it was the opposite.

We may have even considered early retirement, but the ACA experience was very stressful. So it’s definitely back to work.

Thankfully DH found employment with a good company and excellent benefits. We are thrilled with the health insurance, and if the job would end, we would definitely choose COBRA. Even though the premiums would be $1700/month.

We would rather pay $1700 for an excellent plan (very low deductible, plus vision and dental coverage) than have almost nothing on the ACA.

Best to you and yours,
El
Oh, that my ways were steadfast ...
fortunefavored
Posts: 1424
Joined: Tue Jun 02, 2015 8:18 pm

Re: ACA vs COBRA: provider network decisions

Post by fortunefavored »

I would always do COBRA for as long as you can. Insurance is for catastrophic issues.. why give that up until forced to?

All your points seem accurate and valid. The out of area coverage is particularly worrying - for things between "life threatening" and "could be life threatening" is where the risk is. What if you have abdominal pain? It COULD be acute appendicitis.. but you don't know.. what do you do?

I'm in the same boat starting next year when COBRA expires. Tough decisions.
HereToLearn
Posts: 1537
Joined: Sat Mar 17, 2018 5:53 pm

Re: ACA vs COBRA: provider network decisions

Post by HereToLearn »

Not all universities offer student health insurance.

One child had an excellent plan through his university, with out-of-area coverage for summers & breaks that was better than my old company insurance.

Another child's university plan functioned as a group practice model so while the available providers were the best in the state (research university with topnotch destination medical providers), there was no coverage other than emergency coverage when away from school. I had not expected that after the first child's excellent coverage.

I recall looking into coverage at a college my child decided not to attend and was shocked to discover that nothing was offered.

One caution is the date that university coverage ends after graduation. Not a huge problem, but your child may need to enroll in ACA coverage after graduation if employer coverage does not start immediately.

I believe that your child can enroll in the ACA plan near his university, but I have not tried this so cannot advise on logistics of cost, eligibility dates, etc.

I am enrolled in a HDHP ACA plan because that is the most cost-effective plan for me. I am sure you know this but think it bears repeating: OON benefits are paid at the carrier's R&C or usual & customary level, so not at 50% of the charged amount. For example, if your OON plan pays 50% after a $5K deductible with an OOP max of $10K, you might want to think that your total OOP exposure would be limited to $10K, but that is not what I have seen. The only charges that accumulate toward the OOP max are the amounts the carrier deems eligible as the R&C or allowable fee. Amounts that you are liable for in excess of the carrier's allowable do not accumulate toward the OOP max, so it is best to assume that you will only use in-network providers other than the periodic pediatric visit, as you described.
TheHiker
Posts: 491
Joined: Fri Feb 05, 2021 8:34 pm

Re: ACA vs COBRA: provider network decisions

Post by TheHiker »

I am very much interested in practical experiences with ACA as well. For me health insurance is one of the the main reasons I keep working.
My wife has several chronic conditions which are very costly to treat (typically we hit the out of pocket max by February or March of each year).
If I quit working, ACA plans look like the only reasonable option after COBRA.
They look good on paper, but I am very worried about actually getting my wife's healthcare covered.

Her specialist doctors at the top teaching hospital are supposedly covered by a couple HMO ACA plans "with referral and authorization from the health plan".
I wonder what "referral and authorization" means in practice for ACA.
With my PPO plan from work a referral is rarely needed and when it is needed, we just ask the primary doctor to write one. We never had anything not authorized or denied by the insurance, even expensive experimental treatments and off-label drugs.
I suspect this may work differently for ACA plans so would appreciate people sharing their experience.

One of the other ACA plan options we have is Kaiser which many people seem to like. We never had Kasier as we wanted to be able to choose doctors.
As I understand, with Kaiser we won't have to deal with referrals, but will be limited to Kaiser doctors/hospitals and they will only refer to the outside if they don't have a particular specialist. Wondering if anyone had experience.
investorpeter
Posts: 609
Joined: Sun Jul 31, 2016 5:46 pm

Re: ACA vs COBRA: provider network decisions

Post by investorpeter »

We went through the same decision tree earlier this year, and went with COBRA. For us, the deciding factor was that if we switched to ACA in the middle of the year, we would have lost what we already paid towards the deductible and out-of-pocket max for the employer plan for that year. In other words, with ACA you start at $0 for meeting your deductible and max out-of-pocket payments, whereas with COBRA, you can continue with the same limits as though you are still on your employer plan. We already had several thousand towards our deductible paid for that year, as well as several thousand in a "carry over" dental plan, so it was an easy decision to stay with COBRA at least until the end of the year.
crefwatch
Posts: 2500
Joined: Sun Apr 15, 2007 1:07 pm
Location: New Jersey, USA
Contact:

Re: ACA vs COBRA: provider network decisions

Post by crefwatch »

My wife's Fortune 100 Employer still has (self-paid) retiree health plans. You might want to check whether you can get back into them if you leave the employer's plan. In our case, if you ever reject the retirement healthcare plan, you can NEVER elect it in the future. In this case, the plan is so good that it wasn't a hard decision. Your option may be different. I didn't want Medicare Advantage, but the plan is so good that I'm happy to have it.

It's a fine point, but employer plan members under 65 are in a different product, with a different administrator.
PaunchyPirate
Posts: 1163
Joined: Sun Nov 30, 2014 6:58 pm

Re: ACA vs COBRA: provider network decisions

Post by PaunchyPirate »

TheHiker wrote: Tue Sep 28, 2021 11:04 pm
...I wonder what "referral and authorization" means in practice for ACA.
With my PPO plan from work a referral is rarely needed and when it is needed, we just ask the primary doctor to write one. We never had anything not authorized or denied by the insurance, even expensive experimental treatments and off-label drugs.
I suspect this may work differently for ACA plans so would appreciate people sharing their experience.
...
It will be entirely a insurer by insurer situation. The ACA itself doesn't provide any rules on how/when referrals are needed.

In my case, this year I am on an ACA HMO that requires referrals for all specialists. I wasn't thrilled about that, but I didn't have many options. The HMO I chose was with the same insurer that I had been using already for 2 years, but they took away my PPO option and went HMO.

I now needed a referral to see the urologist that I had already been seeing for 5 years. I see the urologist at least once a year and sometimes 2. I will need to get that referral for every appointment that I need to go see him. I don't care for that. And once you get the referral, it is only good for 3 months.

However, the mechanics of getting the referral was simple. My PCP is aware that I see this urologist. My insurance company uses a web portal that my PCPs office is aware of. They enter the portal and enter the referral request. They don't enter a specific Doctor's office in the referral. All they entered was "needs to see a Urologist". It showed up on my patient portal 2 days later. I assume there was some form of review process by the insurance company, but I don't know for sure. I was able to see the referral and it's valid end date. The insurance company told me to ensure that my urologist had my PCP on file, as they needed to submit the PCP's name with the claim in order for the referral to link up to the claim and ensure proper payment. It all worked fine for the one and only time I used a referral.

It's definitely an annoyance. But it worked.

For 2022, I'm keeping my fingers crossed that there is a PPO offered in my location. Based on some preliminary research that I have done, it looks like there will be, albeit by my current insurer's competitor. So it's looking like I will switch insurance companies (and pay a little more) to get my PPO back. I can live with the referrals if I have to. But the expanded network coverage of a PPO is very valuable to me.
HereToLearn
Posts: 1537
Joined: Sat Mar 17, 2018 5:53 pm

Re: ACA vs COBRA: provider network decisions

Post by HereToLearn »

PaunchyPirate wrote: Wed Sep 29, 2021 7:14 am
TheHiker wrote: Tue Sep 28, 2021 11:04 pm
...I wonder what "referral and authorization" means in practice for ACA.
With my PPO plan from work a referral is rarely needed and when it is needed, we just ask the primary doctor to write one. We never had anything not authorized or denied by the insurance, even expensive experimental treatments and off-label drugs.
I suspect this may work differently for ACA plans so would appreciate people sharing their experience.
...
It will be entirely a insurer by insurer situation. The ACA itself doesn't provide any rules on how/when referrals are needed.

In my case, this year I am on an ACA HMO that requires referrals for all specialists. I wasn't thrilled about that, but I didn't have many options. The HMO I chose was with the same insurer that I had been using already for 2 years, but they took away my PPO option and went HMO.

I now needed a referral to see the urologist that I had already been seeing for 5 years. I see the urologist at least once a year and sometimes 2. I will need to get that referral for every appointment that I need to go see him. I don't care for that. And once you get the referral, it is only good for 3 months.

However, the mechanics of getting the referral was simple. My PCP is aware that I see this urologist. My insurance company uses a web portal that my PCPs office is aware of. They enter the portal and enter the referral request. They don't enter a specific Doctor's office in the referral. All they entered was "needs to see a Urologist". It showed up on my patient portal 2 days later. I assume there was some form of review process by the insurance company, but I don't know for sure. I was able to see the referral and it's valid end date. The insurance company told me to ensure that my urologist had my PCP on file, as they needed to submit the PCP's name with the claim in order for the referral to link up to the claim and ensure proper payment. It all worked fine for the one and only time I used a referral.

It's definitely an annoyance. But it worked.

For 2022, I'm keeping my fingers crossed that there is a PPO offered in my location. Based on some preliminary research that I have done, it looks like there will be, albeit by my current insurer's competitor. So it's looking like I will switch insurance companies (and pay a little more) to get my PPO back. I can live with the referrals if I have to. But the expanded network coverage of a PPO is very valuable to me.
I have only been enrolled in an ACA PPO, so cannot offer any firsthand experience, but agree with the PaunchyPirate's comments above.

You may want to see if you can find someone currently enrolled in the plan you are considering joining and discuss the logistics of referrals and authorizations. My plan requires prior authorization for MRI, echocardiogram, and some prescriptions (specifically acne meds for teens/college students). I am able to view the plan's drug formulary prior to enrolling to see which meds require PA. I have been very pleasantly surprised at the coverage allowed by my ACA plan, but have received denial on a couple of meds. Not life-threatening meds, and alternatives were found.

Self-insured employer plans can allow coverage for whatever they want to cover, so you most likely will see differences between a generous self-insured plan and any ACA plan.
Post Reply