Author
Grant Ameel
How the Presidential Election Might Affect COBRA eligibility...
The polls for the presidential election open in less than two weeks and many of us in the healthcare industry need to forecast and prepare for either outcome. As we all know, the two primary candidates are Hillary Clinton, representing the Democratic Party, and Donald Trump of the Republican Party. In this post we’ll examine both candidate’s platforms and more specifically proposals from each side that could have the biggest impact on COBRA eligibility and enrollee numbers.
Hillary Clinton - Democratic Party...
Perhaps the most evident proposal from the Clinton campaign that could dramatically affect the COBRA administration industry is her plan to reduce the age of Medicare eligibility. Clinton’s platform advocates for offering a public-option insurance plan which would allow Americans to voluntarily buy into Medicare when they turn 55. With the current age for Medicare eligibility set at 65, this proposal, if enacted, could impact COBRA eligibility and thus enrollment. In the current landscape those who are 55 to 64 years old, continuation coverage under COBRA is a viable option when a Qualifying Event occurs. However, the option to buy into Medicare, as Clinton proposes, could certainly decrease COBRA eligibility and the number of enrollees for participants ages 55 and up. To what extent those enrollee numbers could diminish will surely depend on the cost to buy into Medicare, but basic economic principles suggest that if more options are introduced to a market there almost certainly will be a noticeable impact on the existing state of affairs.
On the other hand, Medicare eligibility can be a COBRA qualifying event for the dependents of those who become eligible. With that being the case, one would assume that if the age to qualify for Medicare is lowered to 55, the result would be an influx in COBRA eligibility and consequently an increase in COBRA enrollees. Yet, under Clinton’s proposal that probably won’t be the case since she promotes that someone could buy into Medicare at age 55; they still wouldn’t be able to receive it at no cost until age 65. It seems unlikely that an actively insured employee on their employer’s group health plan, who has dependents, would elect to waive their current group plan coverage and pay for Medicare for themselves, and either COBRA or an individual policy for their dependents, at the full cost of the premiums. With that being said, in conclusion, if Hillary is elected President and is able to enact this proposal into law, notwithstanding other potential offsetting reform, we should expect a sizable decrease in COBRA enrollees for qualifying beneficiaries ages 55 to 64, as buying into Medicare will add yet another alternative option for that age group. To what extend those numbers will be effected would remain to be seen.
On the other hand, Medicare eligibility can be a COBRA qualifying event for the dependents of those who become eligible. With that being the case, one would assume that if the age to qualify for Medicare is lowered to 55, the result would be an influx in COBRA eligibility and consequently an increase in COBRA enrollees. Yet, under Clinton’s proposal that probably won’t be the case since she promotes that someone could buy into Medicare at age 55; they still wouldn’t be able to receive it at no cost until age 65. It seems unlikely that an actively insured employee on their employer’s group health plan, who has dependents, would elect to waive their current group plan coverage and pay for Medicare for themselves, and either COBRA or an individual policy for their dependents, at the full cost of the premiums. With that being said, in conclusion, if Hillary is elected President and is able to enact this proposal into law, notwithstanding other potential offsetting reform, we should expect a sizable decrease in COBRA enrollees for qualifying beneficiaries ages 55 to 64, as buying into Medicare will add yet another alternative option for that age group. To what extend those numbers will be effected would remain to be seen.
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Donald Trump - Republican Party...
Trump’s healthcare platform is less detailed than Clinton’s, his campaign primarily focuses on repealing the Affordable Care Act and instilling “free-market principles” to the healthcare markets. In the event that Trump wins the election and is able to successfully revoke Obamacare, there’s a number of factors that could influence how COBRA is utilized. On one hand, the ACA since its introduction in 2010 has been one of, if not the largest, alternatives to continuation coverage under COBRA. Even though the projected spike in Obamacare are already happening this year, government subsidies and tax credits still make it an affordable option for millions of Americans looking to gain medical insurance. Again, basic macro-economic rules would suggest that if the ACA was no longer an option, due to the diminution of competition, there would be an upsurge COBRA eligibility when a QE occurs. Especially when considering some of the nuances of the ACA that make it a more appealing option. For example, carriers cannot deny someone coverage for a preexisting condition, or for any reason, under Obamacare. Consequently, in the absence of Obamacare, someone with a preexisting condition who experiences a QE, COBRA could be the only viable option left if private carriers decide to deny those individuals (if Obamacare is revoked).
On the other hand, there are some stipulations of the Affordable Care Act, that if abolished, could have an adverse effect on COBRA eligibility and thus the number of COBRA Enrollees. One such provision is that under the Affordable Care Act, is the government has instituted an individual mandate. For people who refuse to get coverage when they’re eligible, there will be a fine assessed of $695 per adult in your family or 2.5 percent of your household’s taxable income, whichever is greater, when filling their tax returns. It will be interesting to see if there will be a quantifiable impact on whether or not some people still elect COBRA if there’s no longer an individual mandate to have health insurance under a Trump presidency.
On the other hand, there are some stipulations of the Affordable Care Act, that if abolished, could have an adverse effect on COBRA eligibility and thus the number of COBRA Enrollees. One such provision is that under the Affordable Care Act, is the government has instituted an individual mandate. For people who refuse to get coverage when they’re eligible, there will be a fine assessed of $695 per adult in your family or 2.5 percent of your household’s taxable income, whichever is greater, when filling their tax returns. It will be interesting to see if there will be a quantifiable impact on whether or not some people still elect COBRA if there’s no longer an individual mandate to have health insurance under a Trump presidency.
 | Bottom Line...Of course, this is all speculation based on both candidates proposed healthcare platforms, and as we all know, making promises on the campaign trail is easier said than actually pushing legislation through congress once in office. Nevertheless, regardless of who is elected, whether big or small, a change in the commander-in-chief after 8 years will assuredly shake up the current landscape of the healthcare industry and COBRA eligibility as we know it. That being the case, it could prove very beneficial to have a COBRA administrator (*cough* CobraHelp) who frequently monitors the shifts in healthcare reform on your behalf and will reduce your risk of non-compliance during this impending political transition. |
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