It’s unavoidable. A global health crisis has paralyzed the U.S. economy, and millions of people have lost their jobs. The newly unemployed have several ways to replace employer health benefits, but many find themselves dealing with barriers.
The path to getting insured apart from a job may seem like a long and winding road, but it isn’t impossible. In this article, we break down what options are available to you right now.
Medicaid and CHIP
For those with meager incomes, including those who suddenly found themselves with no income except for unemployment insurance, Medicaid might be the best choice.
If you have minor children living at home, check if the kids qualify for the Children’s Health Insurance Program (CHIP) or Medicaid.
How do both programs work?
Both programs typically don’t charge premiums; however, some states do. Furthermore, both require a small amount in cost-sharing, like copayments.
Medicaid benefits can be retroactive by up to three months. If you incurred medical costs during that period and were qualified for the program but didn’t enroll yet, those expenses may be covered.
When to enroll?
Enrollment for Medicaid and CHIP is available year-round.
What about adults without children?
The situation might be a bit more complicated. If this is you and you live in one of the 37 states that expanded Medicaid, you may qualify for benefits if you earn up to 133% of the poverty level (approximately $17,000 for an individual).
However, in the 12 states that refused expansion, about 2 million low-income adults without children won’t qualify. Parents may be eligible, but it is strictly limited.
If you live in New York and Minnesota, you may want to check out the Affordable Care Act’s Basic Health Program. MinnesotaCare and the Essential Plan in New York consider those who earn up to twice the poverty level (around $32,000 for an individual). However, you may have to pay up to $20 per month for the Essential Plan and up to $80 per month for MinnesotaCare.
Who are eligible?
Eligibility for Medicaid is based on your income on the month you apply for coverage. However, the added $600 per week in unemployment benefits and the $1,200 tax credit that most Americans should receive this year may prevent others from qualifying.
If the company where you used to work had at least 20 employees, you can choose to remain in your current health plan for at least 18 months or longer. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) gives former employees that right.
However, should you choose this option, you must pay the full premium and a 2% administrative fee.
If you can afford it, this plan makes sense, especially if you’re in between medical treatments and prefer to have continuity of care.
How to apply?
Unemployed people have 60 days to opt-in without interrupting coverage. Then, COBRA participants have 45 days to make the first payment to cover the period from the end of employment to that date.
Private health insurance
Private health insurance is another viable option, albeit pricier, and health insurance exchange marketplaces won’t be open until fall. However, the Affordable Care Act makes an exception for people who experience a qualifying life event, such as getting laid off.
People who lost job-based health benefits can apply for subsidies during the special enrollment period. However, individuals who didn’t get health benefits from their employer must wait for the next enrollment period.
Those with incomes below the poverty level but live in states that refused to expand Medicaid don’t qualify for subsidies to pay for private health coverage.
How to apply?
People who live in California, New York, Washington state, Massachusetts, Maryland, Colorado, Minnesota, Connecticut, Nevada, Idaho, Rhode Island, District of Columbia, and Vermont can use their state-run exchanges to search for insurance.
Meanwhile, residents of 38 states can look for coverage on HealthCare.gov even outside of the enrollment period. Alaska Natives and Native Americans in any state can also enroll through the health insurance exchanges at any time.
If you’re seeking to replace your employer-based health insurance from an exchange, you need to apply first for the right to shop, which requires documentation from your former insurer or previous employer confirming that your old coverage has ended or is ending soon. You have 60 days from the date you lost coverage to complete a new enrollment.
Without subsidies to help cover the cost, health insurance exchange policies tend to be expensive. For example, the average price of mid-level plans sold on HealthCare.gov is currently $462 a month. Also, keep in mind that these policies can have thousands of dollars in deductibles that must be paid before full coverage kicks in.
Before you write off private health insurance, look into subsidies provided by the Affordable Care Act. One subsidy you can consider is the premium tax credits, which reduce monthly premiums.
Eligibility for subsidies
Unlike Medicaid or CHIP, eligibility for subsidies is based on projected annual income. You must account for your earnings before losing your job, along with your unemployment benefits. However, the $1,200 tax rebate mentioned above is not counted.
If you do qualify, you need to update your income even after enrollment. Individuals who receive too much aid could be obligated to repay it when they file their 2020 income taxes.
The current administration, as well as other states, are promoting alternatives to the Affordable Care Act. Among these alternatives are short-term policies, which offer more monthly savings than the comprehensive policies provided on the health insurance exchanges. But first, consider the possible financial risks.
What are the risks?
Applicants can be rejected on account of pre-existing health conditions. These insurers can also refuse to pay claims if they determine that a policyholder received treatment for an illness they later decide as “pre-existing.”
These short-term policies are also known for inadequate coverage on hospitalizations. Furthermore, they can cap benefits at a specific amount and decline to pay for anything beyond that.
Have you recently applied to any of these options? What barriers have you encountered?