cHA Advocates for Consumer Protections from the “COBRA Bite”

COBRA, senior woman reading a shocking letter

California Health Advocates submitted this letter to the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, the House Ways and Means Committee and Energy and Commerce Committee to advise on action taken to protect consumers from being subject to recovery payments from COBRA carriers. Specifically we speak on behalf of former employees who were eligible for Medicare when they qualified for extended group health benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and were then subjected to recovery actions by COBRA carriers for thousands of dollars of medical benefits paid on their behalf because they had been eligible for Medicare but not enrolled for benefits.

There is not adequate education and notification for beneficiaries, who are Medicare-eligible but have delayed Medicare enrollment due to employment and being covered from their employer health benefits. When they eventually retire and are offered COBRA benefits that “seamlessly” continue the health coverage they had while an employee, most people unfortunately erroneously assume they can defer their Medicare enrollment until after their COBRA benefits run out.

This, however, is not the case.

Once a COBRA carrier finds out that someone is/has been Medicare eligible (even if they are not enrolled), the COBRA carrier will cease paying health benefits as the primary insurer AND take recovery actions to recoup any monies spent on that individual. This can lead the individual to experience significant financial distress due to recovery actions based on their eligibility for Medicare while receiving COBRA benefits. California Health Advocates has been contacted by more than 22 individuals in recent years caught in this financial conundrum, three of whom were faced with recovery demands of well over $100,000 of COBRA payments. 

Congress has the ability and responsibility to remedy this situation, and clarify and correct the interaction between these two federal programs in a way that protects present and future Medicare beneficiaries.

Read the full letter for more details on the problem and potential solution. Also see the summary, Suggestions for Clarifying Federal Language.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.