There are various avenues available to those who have lost their job to secure health coverage when the time comes: COBRA, private health insurance through marketplaces like eHealth or Medicaid are among your options for coverage when earning less than 138% of federal poverty level.
Not your employment status but household size and income alone will determine your eligibility for low-cost coverage through either the Marketplace or Medicaid; unemployment benefits count as income for this purpose.
Unemployment
As an unemployed individual, there are various strategies available to you when purchasing health insurance coverage. One cost-effective method is using the Affordable Care Act Marketplace where monthly premiums will decrease depending on your income – for example in 2021 an inexpensive Bronze plan costs only $47 after premium tax credits have been applied against an annual income of $35,000 including any periods where employment existed.
Most individuals who lose both jobs and health coverage will still be eligible to enroll in an individual marketplace plan, as their combined wages from before job loss plus unemployment benefits (including the temporary $600 weekly federal supplemental benefit added by Congress) push annual income above poverty level thereby making them eligible for Affordable Care Act marketplace subsidies. Furthermore, losing employer-based coverage triggers a 30-day special enrollment period.
COBRA
COBRA (Consolidated Omnibus Budget Reconciliation Act) is a health insurance program that allows people to extend their coverage from previous employers for up to three years after leaving them, although its specific rules differ depending on your state of residence.
Your COBRA coverage ends, you may qualify to enroll in marketplace health insurance during a special enrollment period that starts 60 days in advance of its end. This offers an easier solution than waiting until regular open enrollment season in September begins.
However, COBRA plans can be expensive as you must cover their full premium yourself without assistance from former employers. Marketplace plans could offer much better value if you qualify for tax credits; especially if your family includes multiple children.
Subsidies
As well as cost-sharing reductions, you may also qualify for a premium subsidy based on how much income you make – the ACA calculator will tell you whether this applies.
The Affordable Care Act mandates that everyone have health coverage, yet this can be prohibitively costly for those without access to work-based plans. To make coverage more cost effective and make premium tax credits available through marketplace/exchange enrollment more readily accessible.
These subsidies are only available to people purchasing plans through marketplace/exchanges, and income is assessed against the federal poverty line (FPL). Thanks to the American Rescue Plan Act’s elimination of FPL cliff through 2025, more people now qualify for financial aid through this source.
Marketplace
Marketplaces are hubs where people gather to buy and sell products, while health insurance marketplaces serve as hubs where individuals and families can shop for private health coverage that suits their budgets. Run by the federal government and some states, health insurance marketplaces provide premium tax credits as well as discounts for deductibles, copays and other out-of-pocket expenses.
The Affordable Care Act offers solutions for individuals who find themselves out of a job and without employer-sponsored health coverage, including short-term health insurance plans that provide temporary coverage until either finding another position or their next open enrollment period arrives. In addition, Medicaid and Children’s Health Insurance Program may provide affordable or free coverage options depending on income levels – options which could provide much needed health protection to many Americans.
Medicaid
Based on your income, you can enroll in health insurance through the Affordable Care Act marketplace or qualify for special enrollment periods due to job loss or having a baby. Medicaid is a public health insurance program offering low-cost or free coverage to eligible individuals and families; eligibility varies by state but typically maximum monthly income exceeds 100% of FPL (federal poverty level).
Register with a Marketplace insurance plan with premium subsidies, which could reduce costs significantly – however be wary of short-term health plans with high deductibles that can become prohibitively expensive over time.
