Getting laid off unexpectedly or voluntarily quitting a job without a new position lined up can be a nerve-wracking experience for many. As you become unemployed, you lose important benefits, such as health insurance.
It’s a scary situation to be in, as you never know when you might need to seek health care, as being uninsured can lead to ridiculously high medical expenses.
Unfortunately, the United States doesn’t have universal health insurance, so Americans must obtain insurance through their employer, apply to federal or state programs, or purchase it through the Health Insurance Marketplace or other insurance sellers.
As you seek new employment, it’s vital to find supplemental insurance until you land a new role. The good news is that you have several coverage options to choose from.
Why do I need health insurance?
It’s crucial to have health insurance when unemployed to maintain regular checkups, ongoing forms of therapy, and because you never know what can happen to your health.
“Insurance protects us from possible life events that we can’t afford to pay for,” says Virgie Bright Ellington, MD, a medical billing expert and author of What Your Doctor Wants You Know to Crush Medical Debt. “Because medical bills are America’s #1 cause of debt and bankruptcy, health insurance helps reduce some financial risk of accident or serious illness.”
According to HealthCare.gov, there are several benefits associated with having health insurance, such as:
- Coverage for essential health care to maintain your health and treat illnesses and accidents.
- Protection from unexpected, high medical expenses.
- Lower costs for in-network health care before meeting your deductible.
- Access free preventive care services, including vaccinations, screenings, and certain checkups, before meeting your deductible.
Because you may not know when you’ll land your next role, it’s important to apply for health coverage as soon as possible. Health insurance in America is necessary regardless of whether you’re employed or unemployed to main regular health and wellness visits and because you never know when you might need it.
“[Health] insurance is even more critical when we have significantly reduced or no income,” Dr. Ellington says. “[The] risk of bankruptcy or a lifetime of debt due to needed medical care is more likely if we’re unemployed.”
Employed vs. unemployed health insurance
People employed in the United States receive health insurance through their employer, Medicare, Medicaid, or the federal HealthCare Marketplace.
“Because employers who provide medical insurance for employees pay for a large portion of monthly premiums, health insurance becomes accessible for those who otherwise are not able to afford costly health insurance premiums,” Dr. Ellington says.
Employer-sponsored health health coverage is offered to employees and qualified members of their immediate family, as part of their benefits package for employment. Large companies are most likely to offer this type of health coverage, with about 99% of companies with 200 or more employees offering health benefits.
These insurance plans provide coverage to about 160 million Americans, which is almost half of the United States.
Health insurance is a widespread benefit for many employees thanks to the Affordable Care Act’s employer mandate. The employer mandate requires certain employers to offer affordable insurance to their full-time employees working more than 30 hours per week or face a tax penalty.
If you’re married, you may be eligible to join your spouse’s employer-sponsored health insurance plan. Usually, changes can only be made during the open enrollment period, which occurs once a year.
However, some insurance plans count marriage as a “qualifying life event,” allowing your spouse to change their health insurance plan within 30 days of nuptials. Other examples of qualifying life events include loss of eligibility, having a baby or adopting, death in the family, changes in residence, and becoming a U.S. citizen.
“Not every company allows employees to add dependents to their sponsored health insurance plan, but it’s worth looking into the terms of their policy, in case it’s available to you,” Mitchell says.
There are a few health insurance options available for people who are unemployed and uninsured.
The Health Insurance Marketplace is often the first place people purchase private health insurance plans. Depending on your income and household size, you may be able to get an affordable health insurance plan through the Marketplace.
If you recently lost job-based health coverage, you may qualify for the Marketplace’s Special Enrollment Period. This allows you to enroll in any health insurance plan available through the Marketplace at any time of the year. You typically have 60 days from the day you lost coverage to enroll.
Aside from the Marketplace, you may be eligible for the following insurance options during your unemployment:
- Medicaid
- COBRA
- Off-exchange
- Medicare
If you cannot afford insurance through the Marketplace or don’t qualify for other health insurance plans, you still may be able to access government-funded healthcare.
How to get health insurance without a job
As you search for health insurance during your unemployment period, there are a few things you’ll want to consider when choosing a plan.
These factors include the following:
- Monthly premium costs. With little to no income, it’s essential to factor price into your health insurance plan. With private health insurance, you’ll be required to pay a premium. A premium is what you pay monthly to an insurance company to receive health coverage. If you don’t make the payments, you may lose your coverage.
- Plan and provider network. If you have certain healthcare providers, hospitals, or pharmacies you prefer, you must ensure they are covered under your plan. When you seek out-of-network providers and services, you may pay additional out-of-pocket costs or receive no coverage.
- Deductibles. A deductible is the amount you pay for covered healthcare services out of pocket before your health insurance plan begins to pay for care. You may be responsible for fully paying for specialist visits, procedure fees, and prescriptions, among other costs. However, the higher your plan’s deductible is, the lower your monthly premium typically will be.
- Copay or coinsurance. In addition to the monthly premium, you may need to pay out-of-pocket expenses for healthcare services, such as copays and coinsurance. A copay is the fixed amount you must pay for a covered service after paying your deductible. Coinsurance is a percentage of costs you pay for medications or healthcare services.
- Drug coverage. If you take prescription drugs, you’ll want to ensure that the health insurance plan you choose covers them. You can review the insurer’s formulary or list of prescription drugs to see what their plans cover. Typically, insurers divide the medications they cover into tiers. This allows you to see approximately how much the copays or coinsurance will be.
It’s also essential to consider your current health situation. If you don’t have any medical conditions, you may not need to choose a plan with a high premium.
“Understandably, many focus on the lowest monthly premiums when looking for insurance coverage without a job,” Dr. Ellington says. “If you don’t have a chronic illness or injury, this is usually the best long-term option.”
“However, those who need regular medical care should look at plans with higher monthly premiums because out-of-pocket costs – the percentage of coinsurance you’re on the hook for – are less,” she adds.
Health care programs for unemployed people
Here are the programs available to people who are unemployed and/or uninsured and how you can apply for coverage:
COBRA
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is temporary health insurance that allows employees and their families who’ve recently lost their jobs to continue their health benefits for a limited period of time through their insurance plan.
COBRA continues your prior job-based health insurance, so you won’t need to enroll in a new plan.