Lost Your Health Insurance? Here’s What to Do

If you’ve lost job-related health insurance in the midst of the coronavirus crisis, you need to take action quickly. A number of options have time-limited deadlines, ranging from 30 to 60 days from the loss of coverage, so it’s important to promptly secure the documents, such as proof of job and health insurance loss, that you’ll need when applying for insurance under the Affordable Care Act (ACA) or Medicaid.

If you experience loss of income and have been paying for your own insurance under the ACA, you can revise your estimated yearly income and perhaps get a subsidy and lower premiums.

What the CARES Act Provides

Federal and state responses to the coronavirus crisis may have only a limited effect on individual healthcare costs. The CARES Act, the $2.2 trillion package signed into law on March 27, 2020, requires health insurers to cover COVID-19 testing (and a vaccine when it becomes available) without cost sharing (deductibles, copays). It also expands insurance coverage for telehealth visits.

Treatment costs for COVID-19 are not covered, however, and if you visit an emergency room or require hospitalization, coronavirus care can be very expensive. An admission for pneumonia—a common complication of coronavirus—costs just under $10,000 without complications, and up $20,292 with major complications or comorbidity. Even those with employer-based health insurance face more than $1,300 in out-of-pocket spending. Some insurance companies, such as Aetna, announced that until January 31, 2021, many of its customers will not have to pay copayments and other forms of cost sharing for coronavirus care. 

The White House also announced it would use monies in the CARES Act to reimburse hospitals for coronavirus care for the approximately 28 million non-elderly Americans who are uninsured. The fear is that uninsured people may be hesitant to get checked if they feel ill, which could lead to a greater spread of the infection. Former Secretary of Health and Human Services Alex Azar said hospitals would be reimbursed at Medicare rates and those who accepted funds would be barred from billing the patients involved. 

The costs of treatment for non-virus related medical care are, of course, not affected. You still need health insurance to cover doctor, hospital, and prescription drug costs.

Here’s how those who have recently lost job-based insurance can get insured now. 

Check In with Your Former Employer

The situation is changing rapidly. Some companies, such as Macy’s, are still paying health insurance for furloughed employees. Others are offering to subsidize COBRA coverage for a period of time (see more on COBRA below). The CARES Act has a number of provisions to incentivize employers to maintain their workforce, such as employee retention credits. So stay connected to find out about your company’s plans. You’ll also want to stay in touch with your former employer to get the documents you need to verify your dismissal and loss of health insurance. 

Join a Family Member’s Policy

If your spouse or parents (if you are under 26 years old) have a health insurance policy, you may be able to join it during the 30 days after you lose your own health insurance coverage. This will often involve extra premium costs for your spouse or parents, but will probably be among the least expensive options for replacement coverage for you.

Sign Up for Medicaid

Medicaid is the nation’s largest health insurer and offers enrollees health insurance that is, on most measures, as good as (and sometimes better than) private coverage. Depending on where you live in, Medicaid can be an available, low-cost option or impossibly hard to get. The best route for checking on Medicaid eligibility is to visit Medicaid.org and click on your state. 

Low income alone is a qualifier for Medicaid in the 36 states plus the District of Columbia that have accepted Medicaid expansion under the ACA. If you now earn below $1,400 monthly as a single person or $2,950 monthly for a family of four, you are probably eligible. (You must include unemployment benefits in this calculation, but not temporary payments under relief or stimulus programs.)  

If you live in one of the 13 states that have not accepted Medicaid expansion, you need to be a parent or meet other qualifications. Minor children may qualify for coverage even when parents don’t. A fourteenth state, Nevada, has adopted Medicaid expansion but not yet implemented it.

Use an ACA Special Enrollment Period

When you or a member of your household loses health insurance, a special enrollment period that extends 60 days from the loss of the job and health insurance allows people to buy an ACA policy at HealthCare.gov. In addition, 11 states and the District of Columbia exchanges have reopened ACA enrollment for various periods so that anyone may apply. The states are: California, Colorado, Connecticut, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont, and Washington.

However, a number of life events—including getting married or having or adopting a baby—will qualify you for special enrollment, so check it out here. Be sure you have, or can obtain, the documents you need, such as a letter from your employer or from an insurance company.

Once you’ve qualified for special enrollment, you can start viewing your options on HealthCare.gov. Examine the policies available in your zip code, compare prices and coverage options, and see which plans have the best star ratings, which reflect member experience surveys, clinical measures, and plan administration. There are three ways to lower your cost on the website:

• Cost-sharing reductions are a federal subsidy that helps reduce out-of-pockets costs such as deductibles, copayments and coinsurance
• Premium tax credits reduce the amount of premiums you pay monthly.
• A catastrophic coverage plan has lower premiums. However, most of the benefits don’t kick in until you have paid the first several thousand dollars of medical costs

To see which of these approaches you may qualify for, begin here.

Get COBRA (Continuation of Health Coverage)

The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows workers, families, and heirs to continue the employer’s group health insurance plan for a limited period if there is job loss, reduction in hours, and other life events. The law applies to group health plans maintained by employers with 20 or more employees. Your health insurance company will notify you about your COBRA rights.

You need to elect COBRA coverage within 60 days of losing insurance, and can continue for up to 18 months. Premiums are set at 108% of the original coverage, and you’ll be paying what was formerly the employer’s share as well as your own. For that reason, you’re likely to get a much better price on health insurance on the ACA marketplace. The advantage of COBRA, especially for people in the middle of treatment, is that it will allow you to stay with your current doctors for continuing medical treatment.

Buy Short-Term Health Insurance

If you’re unable to buy coverage through a special enrollment period or other means, short-term insurance is worth considering. These polices are purchased directly from insurance companies and brokers in states where they are available. Searching “limited duration health insurance” plus your state name should bring up a list of possible companies. (Note: These policies are not sold in California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island, or Vermont.)

Limited duration policies are not required to meet the Affordable Care Act’s requirements for minimum essential coverage. Read the list of exclusions carefully. Pre-existing conditions are commonly not covered, premiums may be based on medical condition, and applicants can be turned down. If you qualify, however, these policies are considerably less expensive than other plans.

Short-term insurance can be kept for up to a year. If you plan to use short-term insurance as a bridge, be careful about setting an end date. An end to this type of policy will not trigger a special enrollment period at HealthCare.gov. However, if the policy ends at the end of the calendar year, it will allow you to apply for a new policy for the following year at HealthCare.gov during open enrollment in the fall.