Affordable healthcare coverage for persons not working, laid off, or unemployed, is available with rates much cheaper than you may realize. Although COBRA may be available, often it's quite expensive, especially if you are including a spouse and/or dependents. Whether you lost your job voluntarily or involuntarily, we review the best low-cost plans that provide the medical benefits you need, and help you quickly and easily enroll. If you have chronic medical conditions, or rarely visit a physician, many inexpensive options are offered.
The Affordable Care Act (Obamacare) provides guaranteed access to quality medical plans in your area. Federal subsidies can substantially lower your premium, since your projected annual income may be lower than in previous years. Several other options are also available that may be more suitable to your existing condition and budget needs. We carefully research all of your choices so you can make an informed decision.
New opportunities created by the current administration have added several cost-effective options for 2020. Community health centers may also be available, along with CHIP and Medicaid. Non-Obamacare options offer plans that can be quickly approved and provide major medical benefits with flexible deductible choices.
Unemployment income must be counted on your federal tax return. It also must be included in your Marketplace income calculation, which can impact your federal subsidy amount and eligibility. The MAGI (Modified Adjusted Gross Income) is the calculation that determines the amount of subsidy each household receives.
If you are laid off from an employer with at least 20 employees, there's a good chance you will be eligible for COBRA benefits. The Consolidated Omnibus Budget Reconciliation Act allows you to continue group benefits for yourself and other qualified family members (including spouses, ex-spouses and dependent children). Typically, 18 months of guaranteed continuation coverage is provided. You may also be eligible if the number of hours you usually work were reduced, you get divorced, a spouse dies, involuntary or voluntary loss of job, or several other situations. You can also change to another plan at any time, although you may forfeit your right to reinstate the previous policy.
Once you become eligible (and accept) new coverage (including Marketplace, short-term, or Group), generally, you can not reinstate previous COBRA benefits. Also, unemployment benefits received are considered taxable. Thus, in addition to including the income on your federal tax return, if applying for a Marketplace medical plan, the income must be used in the financial subsidy calculation. Also, withdraws from IRA accounts are taxable, if you made tax-deductible contributions. Withdraws from 401k accounts will also likely be taxable.
The legislation does not apply to coverage provided by churches or the Federal Government. It also possible that "mini-COBRA" laws may apply, depending upon the state you reside in. Also, if you are eligible for separate benefits through a spouse's existing coverage, it should be considered, since the cost may be significantly less than COBRA. A special enrollment may be offered, which allows you to sign up at any time. Generally, this would be made available within 30 days of losing qualified coverage. A formal offer is provided via mail. If you miss the deadline, in many states, 12-month major medical plans are offered to applicants with no significant or past conditions.
The benefits you receive will be equal to the coverage you previously had, or the coverage that is currently being offered. If there are multiple plans available for active workers, you will also be given the same choices. Copays, coinsurance, deductibles, and maximum out-of-pocket expenses will also not change. "Mini-COBRA" may be available in your state if, the company has less than 20 employees. Pre-existing conditions are covered, and no surcharges, waiting periods, or higher copays, coinsurance, or deductibles will be imposed.
When you apply, no medical questions will be asked, and your household income will not impact the price you pay. The availability of physicians and hospitals will not change, unless the carrier adds or deletes providers. If you become eligible for Medicare during the 18-month period, you are provided a window for guarantee enrollment. Senior Medigap plans include Supplement, Advantage, and Part D prescription drug plans. An annual Open Enrollment begins October 15th and ends December 7th.
Since you are paying "full price" for your COBRA policy, the rate will be equal to the premium your ex-employer pays, plus a small administrative cost. The total premium is generally about 102% of the actual billed rate. However, for insureds that are covered under the 11-month disability extension, the total can be 150%. Regardless, these prices generally are more expensive than Marketplace plans, unless you qualify for a federal subsidy in the form of an instant tax-credit. However, if there are five (or more) family members to be covered, occasionally, the offered rate is lower than private plan prices. Dental and vision benefits can be elected separately.
If you have a negotiated severance agreement, your employer could pay most or all of the premium. However, typically, unless you were designated as a "key" employee, this perk was not included in your termination package. When you initially enroll, you may not have to pay your first COBRA premium when you submit the paperwork. However, within 45 days, you generally must pay the first monthly cost of coverage.
If you are late paying the initial premium, you may not be covered until the payment is received. Generally, a 30-day grace period is provided. A partial payment that is received, but not substantially less than the required premium, will typically result in a notice sent with the required balance due. Upon receipt of the bill, the premium should be paid immediately. If a reinstatement is not approved, a temporary plan may be available.
When the Patent Protection And Affordable Care Act (Obamacare) legislation was passed nine years ago, one of the key components was the creation and implementation of state and federal "Marketplaces" that would offer guaranteed healthcare coverage for unemployed persons, with no medical underwriting. Regardless if you are working full-time, unemployed, laid off, or simply choose not to work, an Open Enrollment allows the vast majority of US citizens under age 65 to obtain quality medical coverage. Although dates can change, generally this period is between November and February. The Medicare Open Enrollment for Seniors is generally between October 15th and December 7th. Both OE periods provide special exceptions that can allow applicants to apply for a policy at any time throughout the year.
Perhaps the biggest cost variable is the amount of federal subsidy offered, and if you are eligible to receive it. Since the subsidy is based on your projected household income, at least initially, your rate may be extremely low. The financial aid is applied directly towards the health insurance premium, so you don't have to pre-pay a policy, and wait for reimbursement. Also, the subsidy is not considered taxable income, and is available regardless of medical conditions. NOTE: There are many low-cost healthcare options for self-employed persons. HSA plans, along with higher-deductible contracts are very popular.
Maximum savings are offered on Silver-Tier plans with "cost-sharing." If your household income is between 100% and 250% of the Federal Poverty Level (FPL), substantial reductions in your copays, coinsurance, deductibles, and maximum out-of-pocket expenses (MOP) will likely result. The three levels of CSR subsidies are 73%, 87%, and 94%.
Illustrated below are several specific examples of plans that qualify for substantial deductible and copay reductions. Rates are based on a married couple (45 years old) with projected household income of $30,000. prices shown include both persons.
Pittsburgh Pennsylvania -- $132 per month -- UPMC Advantage Silver $1,450/$10- $10 and $25 office visit copays with $4 generic drug copay. $1,450 deductible with $2,600 maximum out-of-pocket expenses.
Richmond, Virginia -- $123 per month -- Cigna Connect 850-3 -- $10 pcp office visit copay with $4 generic drug copay. $850 deductible with $2,500 maximum out-of-pocket expenses.
Cincinnati Ohio $132 per month -- Ambetter Balanced Care 11. $7 and $10 office visit copays with $7 generic drug copay. $0 deductible with maximum out-of-pocket expenses of $2,600.
Indianapolis Indiana -- $131 per month -- Ambetter Balanced Care 11 $7 and $10 office visit copays $7 generic drug copay. $0 deductible with maximum out-of-pocket expenses of $2,600.
St. Louis Missouri -- $137 per month -- Ambetter Balanced Care 11 $7 and $10 office visit copays $7 generic drug copay. $0 deductible with maximum out-of-pocket expenses of $2,600.
Tulsa Oklahoma -- $0 per month -- BCBS of Oklahoma Blue Advantage Silver PPO 204 -- 30% and 40% office visit office visit coinsurance (after deductible is met) with $0 preferred generic drug copay. $75 deductible with $2,000 maximum out-of-pocket expenses.
Austin Texas -- $169 per month -- Ambetter Balanced Care 2 $1 and $5 office visit copays with $1 generic drug copay. Deductible and maximum out-of-pocket expenses are $1,750.
Portland Oregon -- $124 per month -- Kaiser OR Silver 3000/30 -- $15 and $25 office visit copays. $500 deductible with maximum out-of-pocket expenses of $2,000.
Temporary Health Insurance Plans
Short-time medical coverage is widely available, and many of the top-rated companies offer several options. Rates are very inexpensive and policies can be kept as long as 12 months in many states. Flexible benefits are offered with a wide range of deductibles, and many available ancillary riders, including dental and vision. Also, since policies are not considered to be "compliant," federal subsidies are not available, pre-existing conditions are not covered, and applications may be denied since they are medically-underwritten.
These types of policies also do not have to adhere to Open Enrollment deadlines. While the standard Open Enrollment for persons under age 65 ends on December 15th, temporary policies can be purchased at any time. The application process takes about 10-15 minutes since there are only a few health-related questions. Of course, you must be a US citizen, and legally reside in the state you are applying for coverage. And although your initial application may be accepted, your renewal application is also medically-underwritten, so a declination is possible.
Unlike Marketplace or COBRA options, maternity and counseling for mental illness may not be covered. While common ailments such as asthma, allergies, and thyroid disorders will generally not cause an application to be denied, other more serious conditions can result in a denial. For example, a combination of hypertension and high cholesterol will likely result in a declination. Although cancer and diabetes is much more common in older adults, they will also make it difficult to qualify for an underwritten plan.
But if a Marketplace plan is not available or is affordable, short-term coverage is a cheap alternative. Shown below are several monthly rates for a 40 year-old male in various cities:
Harrisburg, Pa. (17112)
$56 per month -- Independence American $7,500 deductible
$58 per month -- HCC Life $7,500 deductible
$68 per month -- HCC Life $2,500 deductible
$77 per month -- Independence American $2,500 deductible
$86 per month -- HCC Life $1,000 deductible
Cincinnati, Oh (45242)
$32 per month -- Independence American $7,500 deductible
$34 per month -- Independence American $5,000 deductible
$44 per month -- Independence American $2,500 deductible
$65 per month -- Independence American $1,000 deductible
$85 per month -- National General $2,500 deductible
Raleigh, NC (27601)
$45 per month -- LifeShield National $7,500 deductible
$50 per month -- LifeShield National $5,000 deductible
$63 per month -- LifeShield National $2,500 deductible
$75 per month -- National General $2,500 deductible
$84 per month -- LifeShield National $1,000 deductible
Milwaukee, WI (53202)
$51 per month -- Independence American $7,500 deductible
$58 per month -- Independence American $5,000 deductible
$78 per month -- Independence American $2,500 deductible
$116 per month -- Independence American $1,000 deductible
$116 per month -- UnitedHealthcare $2,500 deductible
Wichita, KS (67201)
$55 per month -- Independence American $7,500 deductible
$62 per month -- Independence American $5,000 deductible
$84 per month -- Independence American $2,500 deductible
$126 per month -- Independence American $1,000 deductible
$134 per month -- UnitedHealthcare $2,500 deductible
Oakland, CA (94601)
$92 per month -- Core Health $250 per day for hospital stay
$126 per month -- Core Health $500 per day for hospital stay
$136 per month -- IHC Group $2,000 per day for hospital stay
UI isn't really healthcare coverage, but it is important to understand, since benefits can be substantial. The Department of Labor provides temporary financial benefits if you are eligible. You had to have lost your job from circumstances beyond your control, and specific income guidelines must be met. Each state operates their own program, although federal guidelines are consistent in each state.
Benefits are designed to be temporary, and not permanent. Although each state has their own guidelines, they must adhere to any relevant federal legislation. Eligibility, length of coverage, and other guidelines, are established by the specific state. Contact with the state should be immediately after you become unemployed. Often, a face-to-face visit is not required. However, you will need to provide proof of prior employment, including dates of work and contact information of employer.
Many resources and programs are available, including your state unemployment office, self-employment assistance, Trade Readjustment Allowances (if your work was impacted by foreign imports), extended benefits, and financial assistance to government workers and persons that served in the Military. NOTE: To continue benefits, typically you are required to report 1-2 times per month regarding possible job offers. Keeping a daily log of your job-seeking activities is recommended.
Other compensation is available through: Disaster unemployment assistance for persons impacted from a recognized national disaster, self-employment help for dislocated workers, trade readjustment allowances for persons who have used all of their benefits, and are impacted from foreign imports, assistance to ex-service members, and help to former federal workers that are currently unemployed.
Medicaid is jointly operated by the federal government and the states where you reside. Individuals or households with limited income can often qualify for benefits, which often equal or exceed Marketplace or Medicare coverage. Currently, more than 70 million persons are covered, including children in CHIP. Enrollment differs, depending upon your state residence. Although income is a main determinant of eligibility, a "spend down" option is available for persons that have substantial medical expenses, which can be deducted from household income.
In rare instances, you may qualify for Medicaid AND Medicare benefits. Specific age and income requirements must be met. However, if both are approved, you will have very few out-of-pocket medical expenses. Also, when covered by both programs, the primary benefits will be paid by Medicaid, and also any Supplement or Medigap plans that are active. You can compare and choose a Senior plan that pays the most out-of-pocket expenses that you anticipate to incur.
"Dual Eligible Beneficiaries" are eligible for Medicare and Medicaid. Part A and Part B premiums, deductibles, coinsurance, and copays can be paid by the following four programs: QDWI, Q, SLMB, and QMB. Many Medicare Advantage plans for Seniors offer these types of plans. Examples include UnitedHealthcare's Dual Complete plan, and Humana's Gold Plus Integrated plan.
Expansion of eligibility in 31 states has allowed more persons to qualify for benefits. It is expected that additional states will also increase their household-eligibility limits. However, low-income households are not the only persons that benefit from Medicaid. Children, women that are pregnant and satisfy specific requirements, and persons on SSI (Supplementary Security Income) can also qualify. These "mandatory eligibility groups" are also joined by deemed newborns, essential spouses, independent foster care adolescents, individuals with Tuberculosis, medically needed blind, and many others.