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How to Get Health Insurance When You're Unemployed

US News & World Report -  Money logo US News & World Report - Money 5/8/2020 Kimberly Lankford
a telephone on a table: Calculator and stethoscope on financial statement concept for finance health check or cost of healthcare © (Getty Images) Calculator and stethoscope on financial statement concept for finance health check or cost of healthcare

As millions of people lose their jobs because of the coronavirus pandemic, they're also losing their health insurance – at exactly the time when they may need the coverage to help pay for care if they end up getting sick. If you lose your health insurance when you lose your job – or if you didn't have health insurance and are rethinking that decision – you may have several options for finding coverage now. But you need to understand the rules and time frames – and some special programs will be expiring soon. Here are six health insurance options, which depend on your income, your state and whether you had coverage recently.

  • Continue your employer's coverage through COBRA.
  • Sign up for coverage through your state's insurance marketplace.
  • You may be able to get an individual policy even if you didn't have employer coverage.
  • Join your spouse's plan.
  • Sign up for Medicaid.
  • Sign up for Medicare if you're 65 or older.

Continue Your Employer's Coverage Through COBRA

If you had health insurance at work and then lost your job, this is usually your easiest option – but may also be the most expensive. COBRA is a federal law requiring employers to let former employees continue their health insurance coverage for up to 18 months after they lose their jobs (COBRA applies to companies with 20 or more employees, but most states have similar laws for smaller employers). You'll keep the same coverage and provider network, and any expenses that you already paid toward the deductible this year will still count. But the premiums will jump significantly because you'll have to pay both the employee's and the employer's share of the cost (plus up to 2% in administrative costs). Employers generally pay about 75% of the premiums for their current employees – the average employee paid $1,242 for single coverage in 2019. But the total cost of coverage – which you'd have to pay on COBRA – averaged $7,188 for the year. The average worker contributed $6,015 for family coverage in 2019, but the full cost of coverage averaged $20,576, according to the Kaiser Family Foundation.

You usually have up to 60 days after you lose your employer's coverage to elect COBRA, but a federal emergency regulation extended the time frame, says Karen Pollitz, senior fellow at the Kaiser Family Foundation. Now, days during the "outbreak period" defined as the period beginning March 1, 2020, and ending 60 days after the announced end of the COVID-19 national emergency, whenever that happens, are not counted toward the COBRA election deadline. "As a result, people who lost jobs and health coverage in March could wait until at least the end of August to elect COBRA continuation," says Pollitz. (This regulation applies to companies with more than 20 employees, but some states may extend the deadline for smaller employers, too.)

You have more time to decide whether or not to choose COBRA coverage, but during that time you'll be in "insurance limbo," says Pollitz. "That is, they're technically uninsured, but once they elect COBRA they'll be insured back to the date of their qualifying event." However, signing up for COBRA at that point could be extremely expensive – you'd have to pay the premiums back to the date that you lost your employer's coverage, which could leave you with a bill of several thousand dollars to pay in a short time period. "On the other hand, if you'd been hospitalized and face a bill for tens of thousands of dollars, that first COBRA premium would be worth paying if you possibly could," says Pollitz. For more information about the special time frame to elect COBRA coverage, see the Department of Labor's COVID-19 FAQs for Participants and Beneficiaries.

Sign Up for Coverage Through Your State's Insurance Marketplace – and Maybe Get a Subsidy

You usually have to wait until open enrollment in the fall (which generally runs from Nov. 1 to Dec. 15) to buy an individual health insurance policy at your state's marketplace or HealthCare.gov. But you qualify for a special enrollment period if you lose your coverage when you lose your job – in that case, you have up to 60 days after you lose your employer's coverage to buy a policy through the marketplace (you can go to HealthCare.gov to find links to the marketplace in your state). Depending on the number of people in your family and your income for the year, you may also get a subsidy to help pay your premiums. If you lose your job, it's definitely worthwhile to see if you can qualify for a subsidy.

In 2020, you can qualify for a subsidy if you're single and your annual income is less than $49,960. Couples can qualify if their household income is less than $67,640, or less than $103,000 for a family of four. You need to estimate your income for the year when applying for coverage on the marketplace to determine whether you'll receive a subsidy. That can be difficult to do during this time of uncertainty, especially if you recently lost your job. Add up what you earned so far in 2020 while you were working, and try to estimate what you might receive by the end of the year. If you end up earning more than expected, then you may have to pay back some of the subsidy when you file your income tax return next spring – or you could get back extra money if you earn less than expected. "If you underestimate income, then you could end up paying back some, or all, of the tax credit received. If you overestimate your income, then you may be entitled to more savings," says Matt Rosenberg, a certified public accountant and personal financial specialist in Grand Junction, Colorado, and a member of the American Institute of CPAs' Financial Literacy Commission. The Kaiser Family Foundation's Health Insurance Marketplace Calculator can give you a quick estimate of your premiums after the subsidy, and you can get the specific numbers for each policy at your state's health insurance marketplace.

If you qualify for a subsidy, your premiums for individual coverage may be a lot less than they are for COBRA. But the individual policy may also have a different provider network, coverage details and higher out-of-pocket costs than your current policy. You will also have to start the deductible period again.

You May Be Able to Get an Individual Policy Even if You Didn't Have Employer Coverage

If you didn't have employer coverage, you usually have to wait until open enrollment in the fall to get an individual policy. "Unfortunately, many people who lose their jobs but who never had employer-based coverage are in a tougher position. Under federal rules, they don't get a 60-day window to enroll in an (Affordable Care Act) plan, and the nationwide open enrollment period is still months away," says Anthony Lopez, vice president of sales and a licensed agent at eHealth.com. But they may still have some options.

Several states that run their own health insurance marketplaces have created a special enrollment period because of the coronavirus pandemic. Originally, 12 states that run their own health insurance marketplaces temporarily reopened enrollment for all residents, even those who were currently uninsured, says Pollitz. Some of those special enrollment periods ended in April, but a few are still open. The deadline is currently May 8 in Washington state; May 15 in Vermont, New York and Nevada; May 25 in Massachusetts; June 15 in Maryland and the District of Columbia; and June 30 in California. "Time periods and rules can vary by state and change quickly, so we recommend that folks in these states check with their state-run marketplace for details," says Lopez. The deadlines have not been extended so far in the states that use the HealthCare.gov marketplace, although people in any state still have 60 days to buy an individual policy after losing employer coverage.

You may also be eligible for a special enrollment period to get coverage in any state if you experienced a qualifying life-changing event. "These may include moving to a new ZIP code or county, marriage or divorce, the birth of a child, a death in the family and more. Any one of these could trigger a 60-day enrollment window," says Lopez. See this list of qualifying events for a special enrollment period at Healthcare.gov.

Join Your Spouse's Plan

If your spouse is still employed and has coverage through his or her employer, you may be able to join as a dependent after you lose your job and your health insurance. Find out how much the premiums will increase to add you to the coverage.

Sign Up for Medicaid

Depending on your income and your state, you may qualify for Medicaid. In the 36 states that have expanded Medicaid eligibility after the Affordable Care Act, income eligibility for adults is 138% of the federal poverty level (and higher in the District of Columbia). Eligibility is based on your monthly income rather than your annual income, so you may qualify even if you had a well-paying job for the first few months of the year and then were laid off. Medicaid is always open for enrollment year-round, says Pollitz. The Medicaid quick screening tool at Healthcare.gov can help you find out if you qualify based on your income, state and number of people in your household. You'll also find links to your state's Medicaid website, and you can find out more at Medicaid.gov.

"If exploring on your own, your best bet is to start at the state Medicaid website," says Pollitz. "You can apply online in every state. If people need help, reach out to a marketplace navigator, which (at least in most states) will also help you apply for Medicaid and be very expert on Medicaid and eligibility standards. Locate navigators using the Find Local Help link at HealthCare.gov or your state marketplace site," she says.

Sign Up for Medicare if You're 65 or Older

You can sign up for Medicare starting three months before to three months after the month you turn 65. It's easiest to enroll online at the Social Security website, even if you don't want to sign up for Social Security benefits yet. See How to Apply Online for Just Medicare for more information.

If you didn't sign up for Part B at 65 because you were working, you have up to eight months after you leave your job and lose that coverage to add Medicare Part B without a late-enrollment penalty. You can't sign up online because you'll need to submit forms proving that you had employer coverage, but you can usually visit your local Social Security office (although those offices are currently closed because of the coronavirus) or mail in the forms. See Social Security's online field office locator for the mailing address and other contact information for your local Social Security office. You can also get help from your State Health Insurance Assistance Program, or SHIP.

Copyright 2020 U.S. News & World Report

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