Liz Clausen never thought her husband would lose his job. He was the first full-time hire at the Austin-based startup where he worked as a programmer, and the economy was booming just a few months ago. Then the COVID-19 outbreak hit, and he was unexpectedly laid off at the end of March. When he lost his job, he lost his health insurance, too — and so did Clausen, a freelance writer who was on his plan. Suddenly, the couple — who had just bought their first house last April — faced the possibility of weathering a global pandemic without health insurance.
Clausen’s story is all too familiar for millions of families across the country. As of May 2, nearly 27 million Americans could potentially lose their employer-based health insurance amid the coronavirus pandemic, according to a Kaiser Family Foundation report published May 13. The numbers might be even higher: nearly 3 million Americans applied for unemployment benefits last week, bringing the total number of people who’ve applied for unemployment over the past two months up to over a staggering 36 million, according to the U.S. Department of Labor.
However, the Kaiser study found that around 12.7 million people who become uninsured after losing their job — nearly half the total — are eligible for Medicaid, while an additional 8.4 million people are eligible for subsidized plans on the Affordable Care Act marketplace. In total, 79% of people who are losing their employer-based insurance are eligible for some form of publicly-subsidized coverage in May.
If you’re among the millions who have lost their employer-provided health insurance, you may have one or more options for affordable coverage. Your choices will depend on your household income, your age, where you live and the employer you or your policy holder had been working for. But you should act quickly — you only have 60 days of open enrollment to choose certain health insurance options.
“Don’t put this off,” Linda Blumberg, an institute fellow in the Health Policy Center at the public policy think tank The Urban Institute, warns. “Assess your options and make a decision quickly so you don’t lose any of [them].”
Here’s what to know if you lost your health insurance amid the coronavirus pandemic:
What are my options for health insurance coverage if I got laid off from my job?
“For those lucky enough, a spouse or domestic partner might have job-based coverage that allows for family coverage,” says Allison Hoffman, a professor of healthcare law at University of Pennsylvania Carey Law School. If you lose your job, it would likely count as a “qualifying event” that would allow you to get on a spouse or domestic partner’s group health plan. If you’re under 26, you could also get on your parent’s group health plan, thanks to a provision in the Affordable Care Act (ACA).
Otherwise, you generally have three other options: Medicaid, COBRA or buying insurance through the ACA marketplace or via an insurance company.
Is Medicaid a good option?
If you lose your health insurance, Blumberg says the “first thing you should do” is check to see whether you’re eligible for Medicaid. And if you qualify, she recommends “absolutely” opting into it. Medicaid can “essentially get you very comprehensive insurance coverage at virtually no cost to the family,” she says.
Medicaid is a joint federal and state program that provides low-cost and often free coverage to eligible Americans. Medicaid generally has no (or very low) premiums and copayments, and unlike COBRA or other insurance, you can enroll in it year-round. You can also cancel Medicaid at any point in the year and go back on employer-sponsored insurance if you find a new job.
Medicaid eligibility varies by state, although federal law requires states to cover certain groups, including low-income families, eligible pregnant women and children, and people on Supplemental Security Income (SSI). (States can also choose to cover more groups, so check to see the situation in your state.)
The Affordable Care Act directed states to expand Medicaid to cover all Americans who make up to 138% of the federal poverty level — which, as of 2020, is $12,760 for an individual and $26,200 for a family of four in the 48 contiguous U.S. states and Washington, D.C. — as long as they don’t qualify for another source of coverage. But that provision was overturned by the Supreme Court in 2012, which ruled that states could opt out of expanding their Medicaid coverage. As of now, 36 states and Washington, D.C. have expanded their Medicaid coverage while 14 have not, according to the Kaiser Family Foundation.
If you live in those 14 states, your options are going to be much more limited. In most non-expansion states you can’t get Medicaid if you don’t have a dependent child, don’t qualify for SSI and are under the age of 65. “Most people who lose a job won’t qualify,” Hoffman writes. “A parent to a minor child might qualify, but only if household income is extremely low for this year.” (You can read more about which states expanded Medicaid here, and what groups qualify for Medicaid in non-expansion states here.)
But if you live in a state that has expanded Medicaid, you can qualify for it if you make below 138% of the federal poverty line. Crucially, Medicaid eligibility is based on your monthly income. So even if you usually make well above the poverty level, a drastic drop in income due a job loss could allow you to qualify. And the extra $600 a week granted by the CARES Act to Americans on unemployment benefits doesn’t count towards your income threshold for Medicaid, although base unemployment does. (Read more about Medicaid eligibility here.)
Is Medicaid available for my children?
Many states also offer Medicaid for children up to much higher household income levels than what’s offered for adults. Some states also run a separate subsidized Children’s Health Insurance Program, or CHIP, which also extends to higher income levels, says Louise Norris, a health policy writer and a health insurance broker. In New York, for instance, children can have a household income level of 400% — over 100,000 for a family of four — and still qualify for CHIP. (The Kaiser Family Foundation has a helpful chart showing qualifications state-by-state.)
CHIP programs also usually have “robust coverage and low cost in terms of your out-of-pocket costs and the sign-up fees,” Norris says. And while there’s a chance of a premium, it tends to be modest.
Is COBRA a good option?
If you had employer-based health insurance before you lost your job, you could continue to buy that coverage at your own expense under the Consolidated Omnibus Budget Reconciliation Act, or COBRA.
But be warned: COBRA can be extremely expensive. People generally have to pay 102% of the full premium: the portion they had been paying while working, the portion their employer had been paying, and an additional 2% in fees. (House Democrats have a pending bill that would in part subsidize COBRA, but it’s unclear if it will pass.)
There are limits on how long you can stay on COBRA. For most people, the limit is 18 months, says Sabrina Corlette, the founder and co-director of Georgetown University’s Center on Health Insurance Reforms. Furthermore, COBRA is also only available if the firm where you worked hasn’t gone out of business and is still providing coverage to at least some of its workers.
Federal law only grants COBRA to people who worked at firms with 20 or more employees. However, some states have what are known as “mini-COBRA laws,” which extend COBRA-like coverage to people who worked at smaller businesses, says Norris. These laws vary by state and might not give you as much coverage as full-blown COBRA — while COBRA grants 18 months of coverage, a mini-COBRA plan might only offer three months, she explains.
You generally have 60 days from the day you lose your health insurance to opt into COBRA, Norris adds. However, the Trump administration has extended that window until the end of the “outbreak period,” which it defines as running from March 1 until 60 days after the current national emergency ends (or another date set by the Department of Labor).
If you opt into COBRA, you have to retroactively pay for coverage for the days between your loss of coverage and when you sign on to the plan. (So if you lose your coverage at the end of May, you have June and July to decide if you want COBRA, but if you opt in on, say, July 24, you have to go back and pay for coverage starting June 1.) But, Norris says, you’ll have “seamless coverage,” as there effectively won’t be a day where you didn’t have insurance.
Hoffman says that some people wait and only enroll in COBRA if they get sick during the opt-in window. “If you get coverage again through a job before you need care, you save some money on the months that you didn’t need medical care,” she says. But, she adds, “if you get sick, you have to pay premiums for all of the months from the time you lost a job until the date of care.”
COBRA might also be a good option if you’re in the midst of a treatment plan for a health problem, as it allows you to stay on your existing insurance, meaning you can keep the same doctor and maintain your coverage of any prescription drugs.
It might also be a good option for individuals who worry about the cost of starting over with a new deductible, which you’ll have to do if you get a new plan, regardless of how much of your annual deductible you’ve already paid. Depending on your financial situation, “it might be worth it to pay the higher premiums on COBRA in order to not have all that extra out of pocket on a new plan,” says Norris.
You also might want to consider COBRA if your household makes over 400% of the federal poverty level, meaning you won’t qualify for a subsidized marketplace plan. In that instance, COBRA might be the better option, says Melanie Hall, the executive director of The Family Healthcare Foundation, a Florida non-profit that helps enroll people in public coverage programs. She adds that employers are sometimes willing to pay a portion of COBRA premiums, so you should check which options are available to you.
“It’s important that you’re really comparing apples to apples and looking at premiums, copays, deductibles in a side-by-side way to decide whether or not COBRA would be a better option,” Hall says.
What about buying a plan on the ACA marketplace?
Another option: Buying an insurance plan on the regulated marketplace created by the Affordable Care Act (ACA).
If you lose your job, you have a special enrollment period of 60 days — before or after you lose your coverage — to buy an insurance plan either through the regulated marketplace or directly from an insurance provider. In most states, the marketplace is available at Healthcare.gov, but 12 states and Washington, D.C. run their own exchanges and have their own platforms.
People who make 100% to 400% of the federal poverty level will also qualify for subsidized coverage on the ACA marketplace, which is offered on a sliding scale based on household income. (The bottom range depends on your state, as you can’t qualify for subsidies if you’re Medicaid-eligible.)
You may qualify for more ACA subsidies than you might think. Norris explains people can qualify for subsidies “well into the middle class.” And Christen Linke Young, a fellow at the Brookings Institution specializing in health policy, says most uninsured people can probably find a plan that’s less than $100 per month.
However, if you make less than 100% the federal poverty level, live in a state that hasn’t expanded Medicaid and aren’t Medicaid-eligible, there’s no government assistance available to help you with health insurance. This is known as the “Medicaid coverage gap.”
While the CARES Act’s extra $600 in unemployment benefits don’t count towards Medicaid eligibility, that money does count towards eligibility for ACA subsidies. Blumberg explains that the extra $600 can help push people in the “coverage gap” over the 100% federal poverty level, qualifying them for marketplace subsidies. However, that extra income could also push some people over the 400% threshold, disqualifying them, she adds.
The ACA subsidies effectively act as tax credit. But, “instead of having to wait until you file your taxes next spring, they will give it to you up front,” Norris says. “They just send it directly to your insurance company to offset the cost of your coverage.”
Unlike Medicaid, your eligibility for ACA subsidies is based on your annual income, which might be hard to estimate given the current economic uncertainty. But Linke Young says that any discrepancies will be reconciled on your 2020 tax returns. If you overestimate your income you’ll get some money back, and if you underestimate it then you’ll pay some money back.
If you make over 400% the federal poverty level, you can still buy coverage from the marketplace without any subsidies. Unlike COBRA, with ACA plans, you don’t have to retroactively pay for any of the days after you lost coverage but before you got on your new plan. If you know you’re going to lose your employer-based health insurance on a certain date, you can apply for insurance ahead of time, but you don’t have to. When you select a plan, it begins the next month, so there will likely be at least a few weeks during which you don’t have coverage if you select a plan after your previous insurance ends.
And remember that, like with Medicaid and COBRA, you can cancel ACA plans throughout the year. So if you get a new job you can cancel your ACA plan and enroll through your employer.
What about buying a plan directly from an insurance company?
If you decide to buy a plan directly from a health insurance company, there are two types of plans you can get, Linke Young explains. First, you can get regulated insurance that complies with all the consumer protections of the ACA, which is basically the same type of coverage you’d get on the marketplace. But you can’t get financial assistance if you don’t buy that coverage via the marketplace, even if your income drops lower later in the year. So even if you unexpectedly make less than the 400% threshold due a job loss, you wouldn’t qualify for subsidies if you bought your insurance directly from a company, says Linke Young.
Insurance companies also sell plans that don’t comply with the ACA’s regulations, which experts are skeptical about. Linke Young says these plans are called “short term limited duration insurance.” Blumberg warns that these non-compliant insurance plans “may look very cheap in the open market,” but in reality they cover much less and can deny coverage to people based on pre-existing conditions. They also might not cover things related to coronavirus and are unlikely to cover prescription drugs.
Blumberg says the safest thing people can do is ask any insurance broker they interact with “whether the policy is Affordable Care Act compliant,” and generally only look for options on the ACA-regulated marketplace. “Be extraordinarily cautious about picking up a plan that looks too good to be true,” she adds.
How do I get health insurance if I didn’t lose my job?
Of the 12 states and Washington D.C. that run their own health insurance exchanges, all of them except Idaho reopened enrollment when the COVID-19 pandemic hit, meaning people could get insurance without needing a qualifying event like losing their employer-sponsored insurance. Some of the enrollment windows have closed, but others, like the one in California, are still open, Norris says.
However, the federal marketplace, Healthcare.gov, has not reopened enrollment. So if you didn’t have insurance before the pandemic hit and now worry about not having coverage, you can’t sign up for a plan unless you have a qualifying event like losing your job. (You can find a list of qualifying events here.)
But you can always enroll in Medicaid or CHIP even if you don’t have a qualifying event. And if you’re uninsured, keep in mind there are free health clinics in many communities that will see you, Corlette adds.
Do I need to get my own health insurance?
The onus is on you to be proactive about getting insurance. If you’re laid off and wait too long, you might miss the window to enroll in a marketplace plan or COBRA. Corlette says that if you get laid off, the first thing she recommends doing is speaking to someone at your company’s human resources department about your coverage options (some employers are continuing health insurance for employees who are furloughed). She then recommends going to Healthcare.gov and immediately filling out an application to see what coverage you’re eligible for.
Some people might opt to not buy new insurance because of the cost, but Blumberg strongly cautions against that decision. It’s always high-risk to be uninsured, but “this is a moment where the risk is inflated,” she says.
If you’re uninsured, the cost of COVID-19 testing can vary wildly depending on your provider and the state in which you live. In some cases it could be zero; Hoffman says facilities that received federal funding through the CARES Act are not allowed to bill patients for anything during that testing appointment their insurance doesn’t cover. Nineteen states are also using Medicaid to cover COVID-19 testing for uninsured individuals. “But if someone gets care in a state or from a provider that doesn’t fit this category, the bill could be thousands for the test plus the related appointment,” says Hoffman. The cost of COVID-19 treatment could also be exorbitantly expensive if you don’t have insurance, ranging from $20,000 to as much as $72,000, she says.
“What we don’t want right now is for people to feel like if they get sick, they can’t access medical care,” says Blumberg. “Both for their own well-being and because if they don’t get testing and treatment, they may then spread the virus to others around them.”
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Contributor: Madeleine Carlisle