Health insurance options if you’re unemployed
You have various healthcare options available to you as you consider your next move, including COBRA, the Affordable Care Act Marketplace, short-term health insurance, Medicaid, and Medicare.[1]
Option 1: COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a law that allows employees who have been laid off or had their hours reduced to continue accessing their previous coverage options for a period of time.[2]
“COBRA is a great mechanism for someone in the first 18 months of leaving a job that provided group coverage,” says Ron Wadley, owner of Insurance for Texans, a company that specializes in helping people access health insurance plans. “For those with ongoing treatment needs, it is typically a very good recommendation to keep the continuity of care.”
COBRA offers coverage for up to 36 months after you leave a job, depending on your qualifying event. You’ll still have access to the same benefits as the group health plan provided by your employer with COBRA coverage. The main downside to COBRA is that you’ll likely be responsible for the full premium, as your employer is no longer required to cover the cost.
See Also: The 10 Best & Worst Medicare Advantage Plans
Option 2: Medicaid or Medicare
Medicaid is an option for those with low enough income to qualify. If you can’t afford private insurance, this can be a way to get the healthcare you need.
Check with the human services department in your state to find out whether you’re eligible for essential health benefits through Medicaid programs. Medicaid eligibility has two parts: what the federal government offers and what the state is willing to provide.
Medicare is another option, though it’s designed for people 65 or older. You’re eligible to enroll three months before you turn 65, so if you’ve been laid off and you’re close to your 65th birthday, it might be a good idea to sign up for Medicare.
There are three main parts to Medicare: parts A, B, and D.
Part A covers hospital visits.
Part B is designed for regular medical expenses like doctor’s appointments and medical equipment.
Part D provides coverage for prescription drugs.
Part A and Part B are considered “Original Medicare.” There’s also a Medicare Part C, which combines Parts A and B into one plan known as Medicare Advantage. If you’re eligible for Medicare Advantage, some providers or health insurance brokers can help you find a plan that has the coverage you need with lower overall costs.[3]
Your county or state human services department can point you in the right direction, or you can go to one of the U.S. centers specializing in Medicare.
See More: The Difference Between Medicare and Medicaid Explained
Option 3: Affordable Care Act
The Affordable Care Act (ACA) created a federal marketplace for health insurance plans. In addition to offering a variety of comprehensive health insurance plans and basic plans, the federal government also provides financial help for those who need it. Based on where your income stands in relation to the federal poverty level, government subsidies may be available to you to cover the costs associated with your health plan.
Helpful Fact:
You can access marketplace coverage through the federal government by visiting Healthcare.gov or through your state-run health insurance exchange.
“Generally, you can only sign up for health insurance on the exchange during open enrollment, which is annually from Nov. 1 to Dec. 15,” explains Dr. Ben Aiken, vice president of health at Decent, a health insurance administrator. “However, losing your employer-sponsored insurance because you were laid off counts as a ‘qualifying event,’ meaning you are granted a special enrollment period for 60 days after your old policy ends.”
You can still get an ACA plan up to Jan. 15 as part of open enrollment, but your coverage won’t start until February. If you enroll in your plan by Dec. 15, you can have new coverage for the new year.
This access can also be useful for people who are self-employed. If you decide to start a small business after leaving your job, ACA plans may offer a way to create health benefits for you and your employees. Self-employment can be challenging — using health insurance exchanges may be a good way to get health insurance benefits without employer-sponsored insurance.
Young adults can also access lower-cost options that only cover catastrophic care through the ACA Marketplace. Many types of Marketplace insurance plans are available, and nearly anyone can find a new plan to meet their needs and cover their medical bills.
Finally, the American Rescue Plan provides extra help and represents an expansion of benefits provided through the ACA. In some cases, you might owe $0 to the insurance company for premiums, depending on your annual income and the subsidies you qualify for.
Option 4: CHIP
The Children’s Health Insurance Program (CHIP) was passed into law decades ago and is designed to ensure that children receive access to healthcare. People with low incomes can access this coverage for their children through their state health and welfare departments.
As with many government programs, your eligibility depends on your household size and income level. If you can’t get coverage for your spouse or children through other means, CHIP may help you ensure dependent children in your home get access to healthcare.[4]
Option 5: Private plans offering healthcare to unemployed people
Some states offer group insurance to people who are unemployed, such as MinnesotaCare in Minnesota.
In general, these programs work by allowing you to choose a plan from what’s available in your county. This medical insurance usually relies on provider networks in a certain area. It can be a way to manage health insurance costs and out-of-pocket expenses when you have a low income.
Check with your state for available plans that offer low-cost health coverage for those with lower incomes.
Learn More: Do You Need Health Insurance Coverage?
Option 6: Short-term health insurance plans
A short-term health insurance plan can help you with a gap in coverage while you look for a new job or wait to see if you qualify for a government plan.
“These plans are intended to bridge coverage gaps for specified periods, ranging from one month to three years,” Wadley says. “The downside is that these plans are not a permanent, long-term solution because of the time constraints. They also can be problematic if you have a major diagnosis or event while covered, as some companies will choose not to renew a policy even though you might have time left.”
Additionally, these plans don’t have a general enrollment period, like federal health insurance Marketplace plans or Medicare. If you miss a general or special enrollment period, you can get a short-term plan to help you cover medical costs until you find a more permanent plan.
Option 7: Catastrophic plans
“Catastrophic plans are designed for those who rarely go to the doctor but want to ensure they’re covered in an unexpected emergency,” Wadley says.
These plans are typically available to young adults and offer you the ability to go to the emergency room, get surgery, or have a hospital stay without spending too much out of pocket. They’re usually implemented through private health insurance, and Wadley suggests that they’re only suitable for a short time before another policy becomes a better idea.
Check Out: Medicare & Ambulances: How to Get It Covered & Save Money
If you meet the location-specific income requirements, you may be eligible to get primary care and other medical services from community health centers. These centers typically offer services on a sliding cost scale based on your income and other factors.
Many of these centers accept Medicaid, even if other local providers won’t. If you have medical problems, no job, and no access to insurance, a community health center might be your most cost-effective option.
