Staying Insured When You’re Out Of Work
Most Americans have health insurance through their employers. Losing or quitting a job can mean losing that coverage. See what affordable options you have to stay insured.
Leaving a job is always stressful, and the idea of losing health insurance makes it even more so. Many employees mistakenly believe that having no job also means going without insurance. That’s not entirely the case, though. Whether you are laid off or leave on your own, you still have a few alternatives.
According to the 1986 federal COBRA act, you may have the right to keep your employer’s coverage for up to 18 months after you leave a job. And it doesn’t really matter why you left, as long as you weren’t fired for gross misconduct. It doesn’t happen automatically, though. You have to inform your insurer within 30 days that you plan to keep your coverage.
Using COBRA provides you with some major benefits:
- You have the very same coverage you had when you were employed.
- You don’t have to change doctors or therapists.
- You can stay on the same medicines and use the same facilities.
- You can’t be turned down for health reasons.
But be careful. COBRA only applies to companies that have 20 or more employees. And you have to pay the entire coverage by yourself. Your former employer no longer chips in.
In most cases, it’s very expensive. With family coverage running $12,000 a year, COBRA is hardly an ideal option for someone who’s out of work. But if you have a serious health condition or are nearing age 65, it might just be your only option.
In many states, it’s now possible to get a reasonable policy without going through your employer. If you’re tight on money but relatively healthy, consider getting a policy with a high deductible. Having a high deductible lowers your monthly insurance bill, and may help you weather the storm. The problem is that your insurance takes longer to kick in. In an emergency, you could get stuck with a hefty bill.
But if you’re not completely broke, then look for a policy with a lower deductible. With a low deductible, you pay out more on the front end but you end up with more coverage. And more coverage is always the better option. One word of caution, though: considering sticking with COBRA if you have a history of serious illness. Once one private insurer turns you down, the others may do the same.
And if you don’t land another job right away? Try to keep your coverage anyway. One idea is to look for a part-time position that offers benefits. Plenty of employers offer insurance even for part-timers. If you go that route, hang on to the job until you’re back at work full time.
But whatever you do, try your best not to go without coverage. You’ll only be asking for trouble when you can least afford it.