Health Insurance Options If You Are Unemployed

Due to COVOD-19, the American economy has taken a dive.  35 million American workers are unemployed.  An  majority of these workers get their health insurance through their employers.  As these folks lose their jobs, they also lose their health insurance benefits they had through their employer.

We will look at a few options available to get health insurance while you are looking for a new job.

Join your spouse’s employer-sponsored  plan

If your spouse has insurance through his or her insurance, typically you have 30 days to request enrollment in the plan.  This option is probably your best because your spouse’s employer likely subsidizes the premiums and employer-sponsored plans have lower premiums and wider networks of physicians and hospitals.

If you are currently with a doctor, you may want to check if your doctor is covered under your wife’s health insurance plan.  If your doctor is not covered, and you are flexible, consider choosing another doctor under the new plan.  That will save you money compared to seeing your regular doctor, who may be “out of network”.

Join your parent’s health insurance plan

Under the ACA (Affordable Care Act), children under 26 can join their parent’s plan even if they have a job and that job offer health insurance.  If you are unemployed, that’s still an option.  So ask your parents if you can join their plan.

COBRA

When a company terminates an employee, it must offer health coverage for 18 months following the termination. So you get to keep your old health insurance plan but you will pay both the employer and employee portions of the health care premium.  So COBRA can be very expensive.  In addition, employers also add an administrative surcharge which makes COBRA even more expensive

It is not uncommon for COBRA to cost $15,000 to $25,000.  While you may have only paid $3000 or so while you were an employee, many people don’t realize that their employer covered the rest.  Now you are responsible for both the employer and employee portion of the premium.

COBRA coverage is retroactive.  So you don’t have to sign up for COBRA right away.  You will typically have 60 days to sign up. If you have a medical emergency, you can retroactively apply for COBRA.

Shop for insurance at the government exchange (ACA)

If you lost your employer-sponsored health insurance, you get a special 60-day enrollment period to buy health insurance under the ACA through the market place.  Based on your income, you may qualify for tax credits that will lower your premiums.

Health insurance policies offered through the exchange must be compliant with ACA – they must offer some type of free preventive care, and provide some coverage for maternity and hospitalization.  These plans cannot deny you coverage if you have a pre-existing condition.

Buy insurance outside of the exchange

You can shop directly with insurance companies via their website or through brokers. You may find a cheaper plan here than in the government exchange described above but the plans are likely to be skinnier and not ACA compliant.

If you are hopeful of getting a job soon that offers health insurance, getting a policy outside of the exchange may not be a bad idea in the meantime.

Medicaid

When people lose their jobs and are looking for health insurance, Medicaid is not on top of their list. Medicaid offers health free or low-cost insurance for people with low incomes. Medicaid looks at monthly income, not annual income.  If you don’t have income and rely on unemployment benefits, you may qualify.

CHIP

Children in unemployed families may qualify for CHIP (Children’s Health Insurance Program) if your income is low enough to meet income thresholds.  As with Medicaid, you can apply anytime.

Bottom Line

Losing your income is stressful. Losing your health insurance only adds to the stress during an already uncertain time in your life.

You best option is to join your spouse’s employer sponsored plan if that is an option. You an also shop for plans on the ACA exchange where plans offered must meet certain coverage conditions, including covering pre-existing conditions. You can find cheaper options outside of the exchange but the coverage is likely to be skinny.  You can stay with your current plan through COBRA but is likely to be very expensive as you will be paying both the employer and the employee portion of the premium.

 

 

 

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