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Insurance and Healthcare Consultant

Tammy Burns is an experienced health insurance advisor. She is ACA-certified for health insurance and other ancillary, life, and annuity product.

Without an employer helping foot the bill, getting health insurance can be costly. But there are resources available to help you find the best plan for your coverage needs and budget. Learn what you need to know about getting health insurance if you’re unemployed.

What You Should Know About Health Insurance When You’re Unemployed

  • Choose a marketplace plan or COBRA: Unemployed individuals have two primary options for health insurance coverage: your state’s health insurance marketplace or COBRA.
  • Consider state programs: Low-income individuals may qualify for Medicaid or Children’s Health Insurance Program (CHIP).
  • Shop around: The most affordable health insurance is the one that balances premiums with health care needs.

How Do You Get Health Insurance When You’re Unemployed?

“Health insurance can be confusing if you don’t get it through your job,” says Michael D. Miller, MD, health care and life sciences expert at HealthPolCom, but there are resources available to help you.

Dr. Miller recommends starting at your local library or using your state’s Health Insurance Marketplace.

“Some social services organizations in your community may also provide assistance or navigation-type of services to people looking for insurance,” Dr. Miller adds. “The best way to find out is to call around and ask since they may have people who do that, but it might not be listed on the organization’s website.”

Healthcare.gov provides information on health coverage options if you’re unemployed. You can get health insurance through the marketplace, which provides cost savings based on your income and household size, not your employment status. You may qualify for a subsidized plan, Medicaid, or the Children’s Health Insurance Program (CHIP), depending on your household income.

Coverage purchased through the Marketplace can begin the first day of the month after losing your previous health insurance coverage.

What Are The Primary Kinds of Health Insurance If You’re Unemployed?

If you’ve lost job-based health insurance, you have two primary options to get health insurance coverage: buy a health insurance plan through the Health Insurance Marketplace or sign up for COBRA coverage.

Marketplace plans

To buy a marketplace plan, start by filling out an application at Healthcare.gov. The application will use your income to determine if you qualify for any savings on the monthly premiums or out-of-pocket costs. If your income is low enough, you may be eligible for Medicaid or CHIP, which provides free or low-cost health insurance.

Medicaid and CHIP are available based on income to families, pregnant women, people with disabilities, and elderly individuals. Some states have expanded programs that offer coverage to all residents beneath a certain income level. You can find out if you qualify by answering a few quick questions about your household size, state of residence, and income at Healthcare.gov. Answering qualifying questions is not the same as applying. To apply, you’ll need to create an account at Heatlhcare.gov or apply through your state’s Medicaid agency.

Even if you don’t qualify for Medicaid or CHIP, it’s worth applying because you may qualify for lower-cost coverage through your state’s program. You can apply for Medicaid or a Marketplace plan any time of year.

Note that your state may have a different name for its Medicaid and CHIP programs. You can determine what the programs are called in your state here.

COBRA

Another health insurance option if you have recently lost employer health coverage is Continuation of Health Coverage, commonly known as COBRA. Under COBRA, you can extend workplace health benefits for a limited time. COBRA usually lasts up to 18 or 36 months, depending on your circumstances, Dr. Miller says.

The upside to COBRA is you get the same coverage you had with your employer, so you can continue using the same doctors and hospitals you went to while employed. The downside is you may be required to pay the full premium or up to 102% of the plan’s cost.

“This may make sense if someone has already incurred a lot of health care expenses in the year and run into their annual “out-of-pocket” (OOP) maximum since if they start a new insurance plan mid-year, they would have restart paying a deductible and would have no costs that would count toward the new OOP amount,” Dr. Miller says.

You’ll generally need to have been insured with an employer who had 20 or more employees to be eligible for COBRA.

Choosing a Marketplace Plan

Within the marketplace, you can choose different types of health insurance plans designated as bronze, silver, gold, and platinum based on the level of coverage:

  • Bronze plans offer the lowest monthly premium but highest costs when you need care, with deductibles that can be thousands of dollars per year. These are best for low-cost coverage against worst-case medical scenarios.
  • Silver plans offer more moderately priced premiums and costs when you need care with deductibles lower than Bronze plans. Silver plans are best if you qualify for a cost-sharing reduction or are willing to pay a slightly higher premium in return for lower costs when you receive care.
  • Gold plans have higher monthly premiums than either silver or bronze plans but provide more help paying for the care you receive with fairly low deductibles. If you receive a lot of medical care, these can be good options.
  • Platinum plans carry the highest monthly premium and provide the lowest costs when you receive care with very low deductibles so your plan starts paying earlier than other categories of plans. If you receive a lot of medical care and don’t mind paying a high monthly premium to have almost all of your other costs covered, platinum plans may be a good option.

You may have access to “catastrophic” plans with low monthly premiums, but very high deductibles and are designed to protect you from worst-case scenarios.

To learn how to calculate your total costs of care and help choose between plan types, visit HealthCare.gov.

You will also need to choose between Exclusive Provider Organization (EPO) plans, Health Maintenance Organization (HMO) plans, Point of Service (POS) plans, and Preferred Provider Organization (PPO) plans within the metal categories. Depending on your location, you may have access to plans of each type within each metal category or only a few. Here is an overview of these plan types:

  • EPO plans are managed care plans where your treatment is only covered at in-network providers, except for emergencies.
  • HMO plans usually only provide coverage at in-network providers except in an emergency and may also require you to live or work in its service area to receive coverage. These plans often emphasize preventative and wellness care.
  • POS plans let you pay less for care received from in-network providers and require you to have a primary care provider who gives you referrals to see specialists.
  • PPO plans also let you pay less for care received from in-network providers, but you can see out-of-network providers without a referral if you’re willing to pay more for the care.

The Centers for Medicare & Medicaid Services provides a PDF with more details on these plan types to help you choose the best plan for you.

Is Financial Assistance Available For Health Insurance When You’re Unemployed?

You can get help with insurance costs when you’re unemployed. “People with low or moderate incomes can get reduced premiums and other financial support for their health insurance through their state’s marketplace,” Dr. Miller says.

The American Rescue Act of 2021 has expanded the financial assistance available to people who have lost their jobs. More people qualify for health insurance tax credits, and those who are already qualified may receive even more assistance. Three out of five eligible unemployed individuals on average qualify for $0 health insurance plans under the expanded benefits, while four out of five will get coverage for $10 or less per month.

Suppose you received unemployment income at any point during 2021. In that case, CMS encourages you to complete an application or update your information at Healthcare.gov by August 15, 2021, to see if you qualify for increased savings.

What Are The Most Affordable Health Insurance Options When You’re Unemployed?

“The most affordable health insurance is the one where you get the most financial assistance, but even if premiums are reduced, there may be deductibles and copayments that will add costs if you get sick or injured,” Dr. Miller says. In general, the most affordable health insurance for the unemployed is through your state’s health insurance marketplace or, if your income is low enough, through Medicaid or CHIP.

“When choosing insurance, it is important to not just look at the monthly premiums because there are insurance options that operate outside of the federal rules created under the Affordable Care Act, and many of those options don’t cover things like prescription drugs, maternity care, or mental health or substance abuse treatments,” Dr. Miller says.

You can preview your health insurance plan options and estimated prices at HealthCare.gov’s See Plans and Prices page.

Additional Resources

For more information on health insurance when you’re unemployed, visit these free resources:

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