Roughly half of Americans get their health insurance through their employers. That means losing your job can be a one-two punch, as it can also mean losing your health insurance coverage.
Job losses between February and May caused 5.4 million laid-off workers to became uninsured, according to a new study from consumer advocate Families USA. The share of working-age adults without health insurance is less than 10% in only five states and Washington, D.C, it found, while in eight states, 20% or more of adults are uninsured.
The layoffs caused by the economic impact of the coronavirus are "going to make it pretty difficult for [those workers]," says Timothy McBride, co-director of the Center for Health Economics and Policy at Washington University in St. Louis. If you do lose your job and your health insurance during the outbreak, though, there are some ways to find coverage.
Almost all big companies (97%) say they offer some kind of severance package to workers, according to a 2018 report from talent development firm Lee Hecht Harrison and pay consulting firm Compensation Resources Inc. Of those, 52% extend medical coverage for at least some time after a layoff.
But there is no national standard when it comes to getting severance. Whether you receive any, and how much, depends on factors like your employer's internal policies, and in some cases, what state you live in. Typically, what you receive is tied to how long you worked for the employer.
If you're married, the easiest way to get coverage once you've lost yours is to jump onto a spouse's plan or, depending on your provider, your domestic partner's plan. A job loss is considered a "qualifying life event" that opens up a special enrollment period that should allow you to make the shift.
If your spouse is still employed and has access to insurance through their job, you should both be able to join their plan, even if you were both on your plan before.
Younger workers, those under the age of 26, may be able to get on to a parent's plan.
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a government program that lets you extend your health plan for up to 18 months after you lose your job. To see if you're eligible for coverage, ask your former employer's HR department or contact your state's labor office.
There is a catch, though: "COBRA can be very expensive," says physician-turned-financial-advisor Carolyn McClanahan, director of financial planning at Life Planning Partners in Jacksonville, Florida.
Under COBRA, you'll continue on with your existing plan but you'll be responsible for paying the entire premium rather than splitting it with your employer. In 2019, the average annual premium for a family plan was more than $20,000, and employers paid roughly three-quarters of that cost, according to data from the Kaiser Family Foundation.
So, for example, workers who were used to paying $150 for their share of their monthly premium could see those costs increase to almost $500 per month under COBRA.
For that reason, COBRA is among the priciest options for those looking to regain coverage. "The evidence and research shows that it's not really a viable option for most people," says McBride. "They don't realize they end up paying the full cost of the premium after they leave their job."
Medicaid is a government program designed to help low-income households access health insurance. Depending on where you live and your income, you may qualify for Medicaid coverage. Income eligibility is based on numbers from your latest tax return: The annual earnings threshold is "about $15,000," says McClanahan.
You can also use HealthCare.gov's calculator to see if you qualify.
Another option is to go shopping for a new health plan. You can purchase a plan through your state's marketplace established under the Affordable Care Act (also known as "Obamacare"). Those sites let you compare and shop the marketplace for plans for you and your family.
Although open enrollment typically happens in the fall, the spike in layoffs related to the coronavirus outbreak is prompting many states to reopen their marketplaces to help streamline the process for those who need to find a new plan fast.
Plans can be expensive, although they are still typically cheaper than COBRA, and many Americans qualify for subsidies, which can help curb costs.
"There are subsidies for the premiums, so if people have low incomes, they could qualify," says McBride, who adds that, when subsidies are applied, marketplace plans could be relatively cheap.
You may also come across so-called "short-term health plans," which are alternatives to traditional health insurance plans. They are not regulated the same way that ACA marketplace plans are and, as a result, don't offer the same benefits and coverage.
For that reason, experts say short-term plans aren't a good choice. "Avoid short-term plans at all costs," says McClanahan.
Another thing to avoid is trying to hunker down and get through the coronavirus outbreak without health insurance. McClanahan says that a pandemic is no time to make a bet that you won't get sick — because if you lose, you could owe tens or hundreds of thousands of dollars to health care providers. "It's stupid to go without insurance" at any time, she says, and especially during a public health crisis.
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