How to Get Health Care Coverage if You Lost Your Job Due to the Coronavirus
If your job — and benefits — are victims of the coronavirus, among your many concerns may be your sudden lack of health insurance.
If you’re like 49% of Americans, you get your health care coverage through your employer, according to a Kaiser Family Foundation study. But the economic effects of the coronavirus will claim an estimated 3 million jobs by this summer, according to the Economic Policy Institute.
If you lost your job recently — or think you may soon — the need to find medical coverage could be urgent.
Before we dig into options, first: A loss of coverage should not affect your decision to get tested for the coronavirus if you suspect you are infected.
Congress passed the Families First Coronavirus Response Act on March 18, which promises free coronavirus diagnostic testing, regardless of whether you have insurance.
The Act does not, however, address coverage of COVID-19 treatment costs if you are uninsured. And COVID-19 is only one concern — how do you pay for the rest of your immediate health care needs?
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
If your job and medical benefits are in danger due to the fallout from the coronavirus, here are options for health-care coverage.
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.
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, so 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 pricy.
COBRA — or the Consolidated Omnibus Budget Reconciliation Act — is designed to provide 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.
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
The open enrollment period for 2020 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 Dec. 15.
Marketplace plans can’t terminate your coverage due to a change in health status — that includes being diagnosed with or being treated for COVID-19.
Within the Marketplace, the 2020 premiums for the average benchmark plan — aka silver plan — is $462, according to the Kaiser Family Foundation. But it’s unlikely you’ll pay the sticker price.
If you’re like 87% of Americans, 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 you 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, ask about the health insurance company’s coverage policy for COVID-19 before you sign anything — currently, many plans cover it the same as any other viral infection, although that policy may change.
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 spread of COVID-19.
Amid the spread of the coronavirus, many health insurance plans are offering to waive the copay for teledoc visits and fees for prescription delivery. The cost of treatment on your own could far exceed the monthly premiums.
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.
Some states have opened an emergency enrollment period for health insurance regardless of your employment status. Check your state’s eligibility by entering your zip code at healthcare.gov.
If you previously had a high-deductible plan and were contributing to a Health Savings Account (HSA) you can use that money to cover healthcare 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.
Some states are also helping out: New York state, for instance, is suspending collection of medical debt owed to the state. Check with your state’s attorney general for updates in your area.
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 this is an exception.
If you don’t pay for 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 staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.
