Having a job provides more than just a paycheck—it often provides valuable health insurance. But how do you get health insurance if you are unemployed?
There are several options, including private health insurance, COBRA, Affordable Care Act plans, public health insurance such as Medicaid, and short-term health insurance. Which option is best for you depends on your eligibility, cost, and what you want from coverage.
Health Insurance Options for the Unemployed
Options for getting health insurance if you are unemployed include government and private health plans.
ACA Plan
The Affordable Care Act marketplace at HealthCare.gov offers health insurance coverage, allowing you to compare options in your area in one place. ACA plans offer comprehensive coverage, including 10 important health benefits, such as emergency, doctor visits, outpatient, maternity, inpatient, mental health, and prescriptions.
ACA plans provide premium tax credits and subsidies to those who qualify based on household income. If you have a household income below 400% of the federal poverty level, you can save through tax credits to help pay for health insurance. You can also save if your household income is above this threshold. ACA plans are the only health insurance policies that have this advantage.
If you don't qualify for those tax credits, ACA health insurance marketplace plans can be much more expensive than employer plans. A 40-year-old with an unsubsidized ACA plan pays an average of $6,108 per year for health coverage. That's just for single coverage. If you cover you and your partner, you can expect to pay double that amount.
Another option is to purchase health insurance coverage directly through a health insurance company. These policies don't necessarily offer the same level of coverage as ACA plans, so you may find a less expensive plan with limited coverage.
COBRA
Are you uninsured because you lost a job where you had health insurance? You may qualify for COBRA insurance if you recently lost your employer-sponsored health insurance, such as being laid off. COBRA allows you to maintain company health coverage, including all benefits. But there is a significant downside: COBRA is expensive because you have to pay the entire premium yourself (plus perhaps a small administrative fee).
Employers typically pay more than half of the health insurance premiums for their health plans, but they typically do not contribute to the premiums for COBRA plans.
The Kaiser Family Foundation estimates that single coverage costs $8,435 per year for an employer-sponsored health insurance plan. The average employer pays a little more than $7,000 of the premium, and employees say the remaining $1,400.
Companies with 20 or more employees that offer health insurance must offer COBRA, but you may also qualify for COBRA if you work for a smaller company. States often require “mini-COBRA” plans for small companies.
Couple Plan
If your spouse gets health insurance through the company, ask the company's benefits department about adding such insurance. Not all companies allow spouses to participate in health plans.
You will usually qualify for a special enrollment period on a spousal plan if you lose health insurance. You can sign up for new health insurance during that special enrollment period and don't have to wait until the plan's open enrollment period.
Adding it to a couples plan will generally increase the premium significantly but will likely still be cheaper than purchasing COBRA coverage. The Kaiser Family Foundation estimates that family coverage costs employees an average of $6,575 per year for those with group health insurance.