How to Get Health Care Coverage if You Lost Your Job

A professional woman leans against glass with an upset expression.
Getty Images

Losing your job can be a stressful life event for several reasons, including a sudden lack of health insurance.

If you’re like 49% of Americans, you get your health care coverage through your employer. But the labor market in the U.S. remains tight, with over 700,000 layoffs in 2023 alone.

If you lost your job recently — or think you may soon — the need to find medical coverage could be urgent.

Here’s how to get health care coverage if you lost your job and your medical insurance benefits.

How to Find Health Care Coverage if You Lose Your Job

Getting health insurance for unemployed individuals may be easier than you think. If your job and medical benefits are in danger due to company layoffs, here are your options for health care coverage in the United States.

Employer-Extended Coverage

This option depends entirely on your employer’s severance package. That could include an extension of health care coverage for a period of time.

And if you haven’t signed anything yet, read through the exit package to see if you have the option for additional coverage — and consider negotiating for an extension of health benefits if it isn’t.

Pro Tip

If you’re on a high-deductible plan, here are some ways to cover costs if you can’t afford your deductible.

These extensions typically are short-term solutions. Unless you have another job with benefits lined up quickly, you’ll need to look for options beyond your previous employer.

COBRA

If you know anything about health insurance after leaving a job, you’ve probably heard of COBRA.

And you’ve probably heard it’s pricey.

COBRA — or the Consolidated Omnibus Budget Reconciliation Act — provides exiting employees the option to continue the coverage they have through their employer’s group health plan. Employers with 20 or more employees are typically required to offer this option.

If you are eligible for COBRA, you have up to 60 days to decide if you want to continue your coverage — even if you initially decline, you still have the option to sign up for it within that period.

Pro Tip

If you work for an employer with less than 20 employers, ask your state insurance commissioner’s office if your state requires continued coverage through a plan known as mini-COBRA.

The continuation coverage is available for up to 18 months — your spouse and dependents can stay covered for three years, depending on the circumstance.

But here’s where it gets expensive: The part of the premium that your employer used to cover is now your responsibility.

So if you spent $400 every month to participate in the group plan, but your employer covered 60%, you’ll now owe $1,000 every month — plus up to 2% more for administrative costs.

It’s probably not the additional expense you need after losing your job, but if you liked your old insurance, it could be worth the cost.

Health Insurance Marketplace

Health insurance for unemployed people is most often obtained through the Health Insurance Marketplace. The open enrollment period for 2024 has ended, but if you’ve just left your job and lost your employer-based health insurance, you qualify for a Special Enrollment Period that typically lasts 60 days.

Note that the 60-day period after you leave your job is the same amount of time you have to decide if you want COBRA, which means you’ll have to choose between one or the other during that time — although there are exceptions to that rule. If you don’t sign up during the Special Enrollment Period, you’ll need to wait until the next Marketplace open enrollment period, Nov. 1 through Jan. 15.

Within the Marketplace, the 2024 premiums for the average benchmark plan — aka Silver plan — is $477, according to the Kaiser Family Foundation. But it’s unlikely you’ll pay the sticker price.

If you’re like the 92% of Americans on private health insurance, you’ll qualify for subsidies like premium tax credits and cost-sharing reductions on deductibles, copayments and other out-of-pocket expenses.

Your household size and income determine which health coverage you’re eligible for and which subsidies qualify to help pay for the coverage.

When you fill out your Marketplace application, you’ll also be notified if you qualify for free or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP). Neither of these have the enrollment period restrictions like Marketplace plans.

If you do decide to go with a Marketplace plan, be sure to look into pre-existing condition policies to avoid upcharges or denial of coverage.

If You Do Lose Health Care Coverage

The price tag for COBRA or a Marketplace plan may leave you feeling a bit ill, so you may be tempted to forgo health care coverage altogether. That’s not advisable, given the cost of medical bills today. Just a visit to the emergency room could cost you $2,600 without coverage.

But if you have no other options, there are still a few stop-gap measures you can take to cover costs until you can afford a plan.

If you previously had a high-deductible plan and were contributing to a Health Savings Account (HSA) you can use that money to cover health care costs even after you leave the plan.

“You can still continue to use your HSA — you just can’t contribute to it while you don’t have a high deductible health plan,” said Alexandra Wilson, a Certified Financial Planner.

Money that you put into an HSA is yours to keep — unlike a Flexible Spending Account, another health expense account, which has a use-it-or-lose-it annual requirement.

If you are forced to seek medical treatment without insurance — like a trip to the emergency room — you can also take steps to reduce medical expenses and negotiate your medical bills.

In the worst-case scenario, you’ll have to take on debt to get medical treatment. We’re averse to telling people to go into debt unnecessarily, but your health and well-being are an exception.

If you don’t receive medically necessary treatment because you can’t afford it now, you’ll likely end up paying more for a pricier treatment later — or worse.

And here’s the thing: Unlike your mortgage lender or credit card company, your doctor or hospital almost certainly doesn’t regularly report missed medical payments to the credit bureaus. That means that unless your medical debt becomes delinquent, it won’t affect your credit score.

If at all possible, avoid costly mistakes when it comes to dealing with medical debt by negotiating prices or asking about financial assistance programs instead. It will allow you to focus on getting better without the added financial stress.

Tiffany Wendeln Connors is a former staff writer/editor at The Penny Hoarder.