Lost Your Health Insurance? Here’s What to Do

If you’ve lost job-related health insurance, you can likely get extended or an alternative policy. In many cases, however, you’ll need to take action quickly.

A number of options for new coverage have time-limited deadlines, ranging from 30 to 60 days from the loss of coverage. So it’s important to promptly secure the documents, such as proof of job and insurance loss, that you’ll need when applying for insurance purchased through the HealthCare.gov Marketplace or through Medicaid.

Purchase Marketplace Coverage

When you or a member of your household loses health insurance, a special enrollment period that extends 60 days from the loss of the job and insurance will allow you to buy an Affordable Care Act (ACA) policy at HealthCare.gov.

Be sure you have the documents you need, such as a letter from your employer or from an insurance company verifying that you lost coverage.

Once you’ve qualified for special enrollment, you can view health insurance options on HealthCare.gov. Examine the policies available in your ZIP code, and compare prices and coverage options with policies that meet your needs and fit your budget. You can see which plans have the best star ratings and which include member surveys, clinical measures, and plan administration.

There are three ways to potentially lower your cost with these policies:

• Cost-sharing reductions are a federal subsidy that help reduce out-of-pocket costs such as deductibles, co-payments, and co-insurance.
• Premium tax credits reduce the amount of premiums you pay monthly.
• A catastrophic health insurance plan has lower premiums. However, most of the benefits don’t kick in until you have paid the first several thousand dollars of medical costs.
  

Join a Family Member’s Policy

If your spouse or parents (if you are under 26 years old) have a health insurance policy, you may be able to join it during the 30 days after you lose your own insurance coverage. This will often involve extra premium costs for your spouse or parents, but it will probably be among the least expensive options for replacement coverage for you.

Sign Up for Medicaid

Medicaid, a joint federal and state program for low-income U.S. citizens, is the nation’s largest health insurer. It offers enrollees insurance that is, on most measures, as good as (and sometimes better than) private coverage.

But depending on the state where you live, Medicaid can be either an available, low-cost option or difficult to get. The best route for checking on Medicaid eligibility is to visit Medicaid.gov and clicking on your state.

Low income alone is a qualifier for Medicaid in many states, but income limits will vary by state. In 40 states that have accepted the Medicaid expansion, you can qualify for Medicaid if you earn 138% of the poverty level, which includes any unemployment benefits.

If you live in one of the states that have not accepted Medicaid expansion, you may need to be a parent or meet other qualifications to qualify for coverage. Minor children may qualify for coverage even when parents don’t.

Get COBRA Health Coverage

The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows workers, families, and heirs to continue on the employer’s group insurance plan for a limited period in case of job loss, reduction in hours, and other life events. The law applies to group health plans maintained by employers with 20 or more employees. Your health insurance company will notify you about your COBRA rights.

You need to elect COBRA coverage within 60 days of losing insurance, and it can continue for up to 18 months. Premiums cannot exceed 102% of the cost of the plan. You may pay what was formerly the employer’s share as well as your own, or your employer may choose to subsidize some of the premium.

For that reason, you’re likely to get a much better price on insurance on the ACA Marketplace. A potential advantage of COBRA, especially for people in the middle of treatment, is that it will allow you to stay with your current doctors for continuing medical treatment.

Buy Short-Term Health Insurance

If you’re unable to buy coverage through a special enrollment period or other means, short-term health insurance is worth considering. These policies are sold directly by insurance companies and brokers in states where they are permitted.

You can search online for limited-duration health insurance in your state name. (Note: These policies are not sold in California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, or Vermont.)

Limited-duration policies do not have to meet Affordable Care Act requirements for minimum essential coverage. Read the list of exclusions carefully. Pre-existing conditions are commonly not covered, premiums may be based on medical conditions, and applicants can be turned down. If you qualify, however, these policies are considerably less expensive than other plans.

Short-term insurance can be kept for up to a year. If you plan to use short-term insurance as a bridge, be careful about setting an end date. An end to this type of policy will not trigger a special enrollment period at HealthCare.gov. However, if the policy ends at the end of the calendar year, it will allow you to apply for a new policy for the following year at HealthCare.gov during open enrollment in the fall.

The Bottom Line

Losing your job can strain your finances in many ways. When you lose your job-related health insurance, you have options to help you continue to receive coverage.

Weigh the pros and cons of buying new Marketplace insurance or extending your coverage temporarily through COBRA. If you have low income, you can also consider enrolling in Medicaid. Consult a financial advisor for more guidance on which option may best suit your specific situation.