I was just looking at something for a family member and had a thought. What is the income period the state looks at for Medicaid eligibility? Immediate?
If so, then what’s the point of COBRA? If I’m laid off from my job, isn’t my income $0/per year and now I qualify for Medicaid? If so, what’s the point of COBRA?
I don’t know how long the income look period is and I am having lots of trouble googling it, but it is a good bet it varies a lot from state to state.
As far as having income in the first place, Not going to file for unemployment ? If you do, that is income. Start a new job but they take 90 days before you can join the health plan ? You’ll have income then. Still, COBRA was a bigger deal before the ACA since if you had a preexisting condition you were absolutely screwed if you went without insurance. Plus, it’s not like medicaid offers “instant approval, see your current primary care doctor in minutes with no wait !”
You generally have to be broke, too. Or nearly broke. Someone who loses their job and has absolutely no assets is in a very different position than someone who loses their job and has a half million dollars in their 401(k). COBRA can help the latter stay insured, since they’re hundreds of thousands of dollars away from being eligible for Medicaid.
Aside from unemployment or waiting for benefits to kick in at a new job, you might get severance pay (one of my husband’s coworkers got six months worth) , you might be able to collect a pension but not quite eligible for Medicare or your spouse may still be employed at a job that doesn’t provide health insurance at a price lower than your COBRA rate. . And again Medicaid has limits on assets- and they’re not that high, nowhere near a half million.
COBRA is intended to a be a sort of stop-gap measure for people who have chronic health conditions to continue their insurance coverage such that they wouldn’t be stuck with no coverage for that condition when they got a new job and that new health plan imposed a preexisting condition period.
In other words, employer health plans (until the end of this year now only due to the ACA) had the option of including a preexisting condition clause for new employees. These clauses could deny coverage, for up to 18 months in some cases, for any condition which the new employee had treatment for during the six months prior to their hire date.
COBRA would allow someone in that situation to retain coverage for a chronic condition during that period. It’s considered qualifying creditable coverage which, in effect, could shorten the preex limit of 18 months.
There are lots of caveats/finer points to that, but that’s the jist of it.
I get what you’re saying though. If someone loses their job, how could they afford COBRA anyway? Sure, many people could not.