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Having a job provides more than a salary—it often provides valuable health insurance. But how do you get health insurance if you’re unemployed?
There are multiple options, including private health insurance, COBRA, Affordable Care Act plans, public health insurance like Medicaid and short-term health insurance. Which option is best for you depends on your eligibility, costs and what you want from coverage.
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Health Insurance Options for the Unemployed
Options for getting health insurance if you’re unemployed include both public and private health plans.
ACA Plans
The Affordable Care Act marketplace at HealthCare.gov offers health insurance coverage, which allows you to compare options in your area in one place. ACA plans offer comprehensive coverage, including the 10 essential health benefits, such as emergency, doctor visits, outpatient care, maternity, hospitalizations, mental health and prescriptions.
ACA plans provide premium tax credits and subsidies to those who qualify based on household income. If you have a household income that’s under 400% of the federal poverty level, you can save through tax credits to help pay for health insurance. You may also save if your household income is above that threshold. ACA plans are the only health insurance policies that have this advantage.
If you don’t qualify for those tax credits, an ACA health insurance marketplace plan can be much more expensive than an employer plan. A 40-year-old with an unsubsidized ACA plan pays $6,108 on average annually for health coverage. That’s just for single coverage. If you cover both you and your spouse, you can expect to pay double that amount.
Another option is to buy health insurance coverage directly through a health insurance company. These policies don’t have to offer the same level of coverage found in an ACA plan, so you may find a cheaper plan with limited coverage.
COBRA
Are you uninsured because you lost a job where you had health insurance? You may qualify for COBRA insurance if you recently lost employer-sponsored health insurance, such as getting laid off. COBRA lets you keep the employer’s health coverage, including all of the benefits. There is a significant drawback, though: COBRA is expensive because you’ll pay the full premiums yourself (plus possibly a small administrative fee).
Employers typically pay well over half of health insurance premiums for their health plans, but they usually don’t typically contribute to premiums for a COBRA plan.
The Kaiser Family Foundation estimates that single coverage costs $8,435 annually for an employer-sponsored health insurance plan. Employers pay slightly more than $7,000 of that premium on average, with employees saying the remaining $1,400.
Companies with 20 or more employees that offer health insurance must offer COBRA, but you may also qualify for COBRA if you work for a smaller company. States often require “mini-COBRA” plans for smaller companies.
A Spouse’s Plan
If your spouse gets health insurance through an employer, check with the company’s benefits department about being added to the coverage. Not all employers allow spouses on health plans.
You will typically qualify for a special enrollment period on a spouse’s plan if you lose your health insurance. You’re able to sign up for new health insurance during that special enrollment period and don’t have to wait until the plan’s open enrollment period.
Being added to a spouse’s plan will generally increase premiums significantly but that is still likely cheaper than buying COBRA coverage. Kaiser Family Foundation estimates that family coverage costs employees an average of $6,575 annually for those with group health insurance.
Catastrophic Health Insurance
Catastrophic health insurance is an option for people under 30 and those facing severe financial problems like homelessness. You can buy a catastrophic policy through the ACA marketplace at HealthCare.gov.
Catastrophic health plans have lower costs than ACA plans while offering similar coverage. One drawback is that catastrophic plans have much higher deductibles and out-of-pocket costs, so you pay all the costs when you need care until you reach the plan’s deductible.
Catastrophic health insurance doesn’t have coinsurance, so once you reach your deductible, the plan picks up the rest of the costs for healthcare services for the year.
Catastrophic coverage costs an average of $3,120 annually for a 27-year-old. If you’re a 40-year-old who qualifies, the average jumps to $3,804 a year.
Medicaid
Medicaid is a low-cost option, if you qualify. The federal/state health insurance program for low-income people offers comprehensive health insurance at little to no cost based on your household income.
Eligibility differs by state and situation. The ACA’s Medicaid expansion lets states cover people with incomes at up to 138% of the federal poverty level. Not all states have expanded to that level, though.
States may also have higher percentages for certain situations. For instance, children and pregnant women may have less strict eligibility requirements than a single adult. An example is California, which has eligibility of 261% of poverty level for children 18 and under; 208% for pregnant women and 138% for other adults.
See your state’s Medicaid eligibility rules at Medicaid.gov.
Medicare
Medicare is a federal health insurance program for people 65 and over, those with disabilities and people with end stage renal disease or Lou Gehrig’s disease (amyotrophic lateral sclerosis, or ALS). If you qualify, Medicare can be a low-cost option with excellent coverage.
Short-Term Health Insurance
Short-term health insurance is another low-cost option but with much less coverage. The federal government allows people to have short-term health plans for one year with the option of extending coverage to three years. Short-term plans aren’t allowed in all states and some states restrict the length.
Short-term health insurance isn’t technically health insurance under the ACA, since it doesn’t offer the essential health benefits required for other health plans. Short-term plans come with limited benefits and coverage limits. For instance, you may have trouble finding a short-term health plan that covers prescriptions, mental health and pregnancy.
Short-term coverage costs slightly over $2,000 annually on average for a 30-year-old. Though these plans have their limitations, you may prefer the low-cost option to help bridge a coverage gap until you can get standard health insurance again.
How Much Does Health Insurance Cost Without a Job?
An ACA health insurance plan costs an average of $509 a month for a 40-year-old with an unsubsidized plan. There are huge differences in how much health insurance costs depending on how you get coverage.
Estimates for ACA, short-term and catastrophic health plans are for a 30-year-old. Employer-provided health plans can’t base your rate on age.
How to Find Health Insurance Without a Job
There are ways to get health insurance without a job. Here are avenues to consider:
- Check with your spouse’s employer about whether you can be added to your spouse’s plan.
- If you are uninsured because you recently lost a job, find out about potential COBRA options from your former employer and look closely at costs.
- Enter your household income information at the ACA health insurance marketplace website at HealthCare.gov to see how much you might pay for an ACA plan.
- See if you qualify for Medicaid in your state.
- Look into short-term health insurance, which offers limited coverage at low costs.
- If you qualify, explore catastrophic health insurance that you can buy through the ACA marketplace.
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Sources
- 2023 Employer Health Benefits Survey, Kaiser Family Foundation; accessed January 3, 2024.
- Federal poverty level, healthcare.gov; accessed January 4, 2024.
- Medicaid & CHIP in California, Medicaid.org; accessed January 4, 2024.
- Who is eligible for Medicare?, U.S. Department of Health and Human Services; accessed January 2, 2024.
- Paying for It: How Health Care Costs and Medical Debt Are Making Americans Sicker and Poorer, The Commonwealth Fund; accessed January 12, 2024.
- What should I do if I can’t pay a medical bill?, Consumer Financial Protection Bureau; accessed January 12, 2024.
- Is there financial help for my medical bills?, Consumer Financial Protection Bureau; accessed January 12, 2024.
Health Insurance for the Unemployed Frequently Asked Questions (FAQs)
What happens if you can’t afford healthcare?
Being unable to afford healthcare can lead to crushing medical debt. The Commonwealth Fund estimates that 22% of Americans have at least $5,000 in medical debt.
If you can’t afford healthcare, you may be able to work with healthcare providers to reduce the debt. For instance, you could talk to a hospital’s finance department about negotiating the healthcare bill or see if the provider accepts an interest-free repayment plan.
Charity care is another potential option that can be offered by your state or healthcare providers. The Consumer Financial Protection Bureau suggests that you request a copy of your hospital’s financial assistance policy, fill out an application form for the program and, if your medical debt has gone to collections, notify debt collectors that you’re applying for assistance.
Obamacare, which is another name for Affordable Care Act plans, are typically not free, but you may pay discounted costs if you qualify for premium tax credits.
Costs for Medicaid, a federal/state health insurance program for low-income people, are based on household income, so you may pay little to nothing for a Medicaid plan depending on your income.
How long do you have insurance after leaving a job?
There is no hard rule about how long a business must cover you after ending employment. It’s up to the business to decide how long you can stay on the group health insurance. Health insurance could be canceled immediately, by the end of the week, the end of the month or after a longer period.
However, if you qualify for COBRA, employers must allow access to those plans for 18 months or longer depending on why you lost employer-sponsored coverage.
How does COBRA insurance work if I quit my job?
COBRA insurance lets you temporarily keep your former employer’s health insurance plan if you quit, lose your job or qualify for another reason, such as you’re no longer eligible for a company plan because of reduced hours. COBRA lets you keep the same coverage for a period, but the employer typically doesn’t help pay premiums. That makes COBRA coverage expensive.
Employers with 20 or more employees with group health coverage must offer COBRA coverage, though many states have “mini-COBRA” laws for smaller employers.
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