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 low-cost plans that provide the medical benefits you need, and help you quickly and easily enroll to cover the gap.
If you have chronic medical conditions, or rarely visit a physician, many inexpensive options are offered. Qualifying for low premiums can save an individual or family thousands of dollars per year. Staying covered during a gap between jobs can also be very inexpensive, depending on the type of policy selected. Often, the cost of coverage is substantially less than employer-provided benefits.
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. Reduction in premium is based on household income and size of household.
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. Temporary plans can offer up to $2 million of benefits, and extend coverage to 24-36 months (maximum period varies by state). Office visits and prescription drug copays are offered.
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 your household income substantially changes, the amount (or eligibility) of the instant tax credit can also change. Since your projected yearly income may be less, the rate you pay may also be much lower than expected.
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.
Note: If you miss the deadline, in many states, 12-month major medical (temporary) plans are offered to applicants with no significant or past conditions. Benefits are generally capped at a maximum of $2 million, and without a rider, a deductible applies to most office visits and prescriptions. Urgent Care and telemed visits often are available with a copay.
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. Many Advantage (MAPD) plans include prescription drug benefits. Deductibles range from $0 to $435.
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, currently the OE period is from November 1-December 15th. Effective dates of benefits are January 1, and the initial monthly premium is due between January 1 and January 15th. A grace period is typically granted for the acceptance of late payments. If a policy lapses, although non-Exchange plans will be offered, plans that cover pre-existing conditions will not be available until January 1 without an approved life changing event.
The Medicare Open Enrollment for Seniors is generally between October 15th and December 7th. Supplement, Part D prescription drug, and Advantage plans are offered. Both OE periods provide special exceptions that can allow applicants to apply for a policy at any time throughout the year. Common examples are divorce, losing qualified benefits from an employer, becoming ineligible for Medicaid, and moving to a different service area. Medical questions are not asked, and there is no waiting period to submit claims. The effective date is generally on the first of the month.
Perhaps the biggest cost variable (under age 65) 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 $33,000. prices shown include both persons.
Pittsburgh Pennsylvania -- $174 per month -- UPMC Advantage Silver $700/$15- $15 and $30 office visit copays with $4 generic drug and $15 preferred brand drug copays. $700 deductible with $2,600 maximum out-of-pocket expenses.
Richmond, Virginia -- $149 per month -- Anthem HealthKeepers Silver X 6250 S05 -- $15 pcp office visit copay with $20 and $40 generic drug and preferred brand/ non-preferred generic copays. $625 deductible with $2,100 maximum out-of-pocket expenses.
Cincinnati Ohio $158 per month -- Ambetter Balanced Care 12. $10 and $30 office visit copays with $10 generic drug and $35 preferred brand drug copays. $950 deductible with maximum out-of-pocket expenses of $1,850.
Indianapolis Indiana -- $172 per month -- Ambetter Balanced Care 12. $10 and $30 office visit copays with $10 generic drug copay. $950 deductible with maximum out-of-pocket expenses of $1,850.
St. Louis Missouri -- $168 per month -- Ambetter Balanced Care 11 $8 and $20 office visit copays $8 generic drug and $35 preferred brand drug copays. $0 deductible with maximum out-of-pocket expenses of $2,700.
Tulsa Oklahoma -- $172 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 $2,700 maximum out-of-pocket expenses.
Austin Texas -- $150 per month -- Ambetter Balanced Care 5 $0 and $5 office visit copays with $0 generic drug copay. Deductible and maximum out-of-pocket expenses are $1,950.
Portland Oregon -- $133 per month -- Providence Health Plan Connect 4500 Silver -- $15 and $40 office visit copays. $1,000 deductible with maximum out-of-pocket expenses of $2,500. Preferred and non-preferred generic drug copays are $10 and $25.
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. Policies can be quickly issued for one person or a family. Shown below are several monthly rates for a 40 year-old male in various cities:
Harrisburg, Pa. (17112)
$97 per month -- UnitedHealthcare $10,000 deductible
$118 per month -- UnitedHealthcare $5,000 deductible
$146 per month -- UnitedHealthcare $2,500 deductible
$223 per month -- UnitedHealthcare $1,000 deductible
Cincinnati, Oh (45242)
$77 per month -- National General $10,000 deductible
$87 per month -- National General $5,000 deductible
$113 per month -- Everest $2,500 deductible
$137 per month -- Everest $1,000 deductible
Raleigh, NC (27601)
$80 per month -- Companion Life $10,000 deductible
$95 per month -- Companion Life $5,000 deductible
$123 per month -- Everest $2,500 deductible
$152 per month -- Everest $1,000 deductible
Milwaukee, WI (53202)
$98 per month -- Everest $10,000 deductible
$114 per month -- Everest $5,000 deductible
$132 per month -- Everest $2,500 deductible
$160 per month -- Everest $1,000 deductible
Wichita, KS (67201)
$71 per month -- National General $10,000 deductible
$76 per month -- National General $5,000 deductible
$118 per month -- National General $2,500 deductible
$207 per month -- UnitedHealthcare $1,000 deductible
Austin, TX (78722)
$100 per month -- Companion Life $10,000 deductible
$121 per month -- Companion Life $5,000 deductible
$187 per month -- Everest $2,500 deductible
$229 per month -- Everest $1,000 deductible
UI isn't actually 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. The COVID-19 virus in 2020 provided massive unemployment benefits to US workers.
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.