How does COBRA work with Medicare?
If you have COBRA and you’re eligible for Medicare but not enrolled, COBRA may only pay for a small portion of the health care services you get, and you may have to pay most of the costs yourself. Contact your COBRA plan and ask what percent they pay.
Avoid gaps in coverage & the Part B late enrollment penalty
If you have COBRA before signing up for Medicare, your COBRA will probably end once you sign up. You have up to 8 months after you stop working (or lose your health insurance, if that happens first) to sign up for Part B without a penalty, whether or not you choose COBRA. If you miss this period, you'll have to wait until January 1 - March 31 to sign up, and your coverage will start the month after you sign up. This may cause a gap in your coverage, and you may have to pay a lifetime Part B late enrollment penalty. To avoid unexpected medical bills, you may need to sign up for Medicare as soon as you are eligible. Contact your State Health Assistance Program (SHIP) for free, personalized help with this decision.
The way that COBRA and Medicare coordinate depends on which form of insurance you have first. While it is possible to get COBRA if you already have Medicare, it is not usually possible to keep COBRA if you have it before you become Medicare-eligible. Specifically, whether you can have both COBRA and Medicare depends on which form of insurance you have first.
- If you have COBRA when you become Medicare-eligible, your COBRA coverage usually ends on the date you get Medicare. You should enroll in Part B immediately because you are not entitled to a Special Enrollment Period (SEP) when COBRA ends. Your spouse and dependents may keep COBRA for up to 36 months, regardless of whether you enroll in Medicare during that time.
- You may be able to keep COBRA coverage for services that Medicare does not cover. For example, if you have COBRA dental insurance, the insurance company that provides your COBRA coverage may allow you to drop your medical coverage but keep paying a premium for the dental coverage for as long as you are entitled to COBRA. Contact your plan for more information.
- If you have Medicare Part A or Part B when you become eligible for COBRA, you must be allowed to enroll in COBRA. Medicare is your primary insurance, and COBRA is secondary. You should keep Medicare because it is responsible for paying the majority of your health care costs. COBRA is typically expensive, but it may be helpful if you have high medical expenses and your plan covers your Medicare cost-sharing or offers other needed benefits.
Note: If you are eligible for Medicare due to End-Stage Renal Disease (ESRD), your COBRA coverage is primary during the 30-month coordination period. Be sure to learn about ESRD Medicare rules when making coverage decisions.
Source: https://www.medicare.gov/basics/get-started-with-medicare/medicare-basics/working-past-65/cobra-coverage
