As of the end of March, over 6.6 Americans filed for unemployment due to the effect COVID-19 is having on the U.S. economy. This high rate is expected to climb even higher over the next several weeks, and potentially will surpass the unemployment rate of the 2008 recession.
A serious issue that accompanies this steep rise in unemployment is the fact that roughly half of working Americans currently get their health insurance through their employers.
Thus, millions of U.S. citizens have just lost not only their jobs, but their insurance coverage as well. This implies that should newly unemployed people end up in the hospital due to COVID-19, they and their families could face staggering amounts of debt. Many individuals may choose to avoid getting diagnostic testing out of fear of facing medical bills they no longer have the means to pay for.
According to Hanna Horvath, personal finance expert and data analyst for Policygenius you “really should make sure you have health insurance now.” For many Americans right now, however, it’s not as simple as it sounds.
If you have recently lost your job due to COVID-19 and your company gave you a severance package, make sure you carefully read through it to check if you are offered any additional medical coverage. According to Horvath, it’s also a good idea to speak with your HR representative just in case. “All things considered, they will be happy to help you navigate your benefits, “ she says.
Here is the current list of health insurance coverage options for Americans.
Affordable Care Act
There are certain life circumstances that qualify individuals to enroll in programs offered by the Affordable Care Act (otherwise known as Obamacare). Losing medical coverage due to the loss of a job counts as one of these circumstances. The health insurance plans under the Affordable Care Act are often equally as pricey as private insurance plans. However, people who live in households that make a total income that is significantly below the federal poverty line may qualify for subsidies.
There is about a two month (60 day) window after you lose insurance coverage under your employer to enroll in an Obamacare marketplace plan. These plans will most often go into effect on the first day of the month once your job officially ends and you choose a plan.
COBRA, also known as the Consolidated Omnibus Budget Reconciliation Act, is designed to extend your current healthcare insurance plan for a maximum of 18 months following a job loss. Employers who have a minimum of 20 employees working full time are required by law to offer COBRA, and typically this plan is also offered to retirees and former employees as well as their dependents. As of now several states have expanded their coverage. If you are unsure if you qualify for this coverage, speak with your HR representative or contact your state’s labor office.
COBRA allows individuals to stay on the same healthcare insurance plan they were previously offered through their employer. In other words, nothing would change in terms of their healthcare coverage. From a cost standpoint, however, you as an individual will now have to pay for the entirety of the insurance plan, as your former employer will no longer pay for a certain percentage of the plan. On top of this, you will also be charged a 2% administrative fee.
Other Healthcare Coverage Options
There are other healthcare options for certain individuals. If you are under the age of 26, you may be eligible to join your parents’ employment health insurance plan. If you are married or have a partner, you may be able to join their employee-sponsored plan. There is a 30 day window from the time your previous employer stops covering your insurance plan to enroll in a spouse or family member’s insurance plan.
Depending on where you live in the U.S, you may be eligible for Medicaid. This program provides healthcare coverage for families and children who are low-income, the elderly, individuals who have disabilities or who are pregnant. Check with your state to see if you qualify for Medicaid.
If you are considering purchasing a short-term healthcare plan, make sure you take careful consideration before doing so. Many of these programs may not include coronavirus coverage and could lack other essential coverage.