Published December 11, 2012
Losing your job is unnerving enough-- add to that the prospect of not having health insurance and it can be downright frightening to think about budgeting.
Many newly-unemployed people think government-mandated and often costly COBRA is their only choice for health insurance, but there are other options to keep the unemployed from joining the uninsured pool. None of the options are going to be as cheap as employer-sponsored health-care plans, but there are ways to get coverage without breaking the bank.
“COBRA is an option but increasingly very few people can cover the cost,” says Martin Rosen, co-founder of Health Advocate. “What people are doing when they become unemployed or underemployed is they are either going without or cobbling together different pieces.”
Rewind just a few years ago and anyone who lost their job was not only guaranteed their employer’s coverage through COBRA, but the government picked up some of the cost. Now, former employees have to pay the entire amount, which can eat away at their savings and unemployment benefits. Still experts say COBRA might be the best option for people with pre-existing conditions because they can’t be denied coverage, which isn’t the case if they were shopping for health insurance in the individual market.
If you are unemployed and your income has taken a hit you may qualify for Medicaid, which is government subsidized health insurance for people that fall into a percentage of the poverty line. “Its health insurance for the impoverished,” says Rosen.
According to HealthCare.gov, Medicaid, which is operated by each state, provides health coverage for lower income people, families and children, the elderly and those with disabilities. Eligibility requirement varies from state to state, and to find out if you qualify click here.
If you make too much to be eligible for Medicaid but find yourself with a serious illness a require immediate medical care, Rosen says that if you end up in a hospital, you could become eligible for Medicaid because the cost of the hospitalization and treatment could push you below the poverty threshold for Medicaid recipients. He says hospitals will expedite the process to help you qualify because they want to get paid. The Medicaid benefits can even extend beyond your release from the hospital. The length of time varies but could be as long as six months, he says.
Families with incomes too high to qualify for Medicaid may be eligible for The Children's Health Insurance Program (CHIP) which covers uninsured children in families with moderate incomes. The program is supported by federal and state funds and is run by each state. There’s also the Pre-Existing Condition Insurance Plan (PCIP) which targets people who have been uninsured for six months or longer, have pre-existing conditions and have been denied coverage for their condition. With PCIP you have to pay the premium, deductible, copayments and coinsurance amounts but you won’t have to pay more because of your medical condition. You have to be a citizen or national of the U.S. to qualify.
If you aren’t eligible for any federal or state programs, there are some low-cost individual plans that provide either short or long-term coverage. According to Anthony Lopez, small business expert at HealthInsurance.com, if you are leaving one job and plan to be employed shortly thereafter you can purchase a short-term health insurance plan that will cost about 20% less than what a individual plan would cost. He also says you can purchase a high-deductible plan that will have lower monthly premiums. “Just because you have a high deductible plan doesn’t mean you are losing primary benefits,” says Lopez. “You still have co-pays when you go to the doctor or get prescriptions. The deductible comes into play if you end up in the hospital or need out-patient surgery.”
Individuals can also purchase a Health Savings Account plan or a HSA plan that allows you to pay everything out of pocket except for preventive care. The out-of-pocket expenses go toward your deductible and once you satisfy that, the health insurance kicks in. According to eHealthInsurance.com, in February 2012, HSA-eligible plan policyholders paid on average $5 less a month for individuals and $14 less a month for families.
If health insurance simply isn’t in the budget, there are ways to get discounted services. Rosen says pharmaceutical companies have programs where they give discounts to people based on income and coverage plans. For dental care, consumers can tap school-run clinics that offer services at a discounted or sometimes free rate. You should also ask for discounts when seeing a health-care provider, and always shop around because the cost of medical care can vary from one location to another even in the same ZIP code, according to Rosen. “These aren’t perfect answers for everybody but they can be good alternatives if you have limited or no income.”