In America, our healthcare coverage is tied to our employment. That makes losing your job very scary, especially during this pandemic. If you’re a healthy person who doesn’t need any medications, you can try really hard to avoid getting into an accident or catching Covid. Maybe just don’t leave the house and you’ll be alright (please don’t take this approach).
For most people, that’s not an option. Some of us need life saving medications or procedures, making losing your job just plain terrifying. To fill your healthcare gap while you search for a new job, you have 2 main options:
Buy a plan through the Affordable Care Act’s (ACA) Health Insurance Marketplace (which can also direct you to public plans like Medicaid or Medicare)
Sign up for COBRA coverage
ACA and Healthcare.gov
If you’re out of a job because you were laid off, fired, or decided to quit, visit healthcare.gov right away (after you’ve filed for unemployment benefits). While the ACA has greatly increased Americans' access to health insurance, the Supreme Court ruled in 2012 that states are allowed to opt out of the law’s Medicaid expansion. Still, 38 states and the District of Columbia have all expanded Medicaid.
Here are the 12 states that have not:
Alabama
Florida
Georgia
Kansas
Mississippi
North Carolina
South Carolina
South Dakota
Tennessee
Texas
Wisconsin
Wyoming
Healthcare coverage in California
I live in California which offers Medi-Cal through Covered California for those that lost their job or have very low income. To qualify you must make less than $18,755 annually if you’re single or $38,295 for a family of 4.
Unfortunately for people who live in the higher cost of living parts of California, like me, it’s hard to qualify based on income. In San Francisco, my annual rent comes out to $20,208. In order to stay in my home, I have to make more than that (not accounting for utilities, food, etc) so I’m disqualified from Medi-Cal this year.
It’s a tough position to be in and I’m fortunate that I had savings to lean on during my first year of self employment while I was covered by Medi-Cal. Still, California offers more than many states and the plans are very comprehensive covering doctor visits, prescription, seeing specialists, and more.
COBRA
COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a federal law that lets you stay on your employer’s health insurance plan for around 18 months, on average. This law only applies to companies with 20 or more employees.
Unfortunately, you have to pay the full premium yourself, which can get very pricey, usually $600/month. On the other hand, you maintain your progress on paying the plan’s deductible and can keep the same doctors.
Other coverage options (approach with caution)
Outside of Medicaid, Medicare, COBRA and Healthcare.gov, there are a few more options but be wary of these. In most states, you can pick up temporary health insurance plans if you aren’t eligible for public plans or subsidies through ACA. The biggest concern with these plans is that they don’t have to be ACA compliant.
These plans usually exclude these categories:
Maternity care
Mental health care
Preventative care
Prescription drugs
Blanket exclusions for preexisting conditions
Another option is to choose a Christian Ministry Plan, which is also not regulated by ACA. They usually offer lower rates than other insurance options and have been around a long time, mostly used by Christian sects like the Mennonites, amongst others.
While they are called health care plans, they are under no legal obligation to actually pay medical claims and there is no government oversight. For a deep dive into this industry, check out the John Oliver Last Week Tonight episode on healthcare sharing ministries.
Finding coverage isn’t easy
It’s hard to believe that this WASN'T done by design. There’s a lot of bureaucracy, red tape, and eligibility limitations, making it feel like state governments don’t actually want to help you. But it’s worth getting coverage anyways while you search for a new job. Make sure to ask them for details about the insurance plans they offer–before you sign the contract.
Check out the rest of the Layoff Guide:
How to Take Care of Yourself, Your Finances, and Your Health
Understanding Severance Agreements
Can I Earn Money While Receiving Unemployment Benefits