No job, no health insurance. Now what?
Categories: Health Insurance,SCHIP,Healthy Living
Tags: wall street journal cobra unemployment aetna health insurance aarp
One way to replace your benefits is to hold on to them. Under the federal COBRA law, previous employees can continue their insurance in the company plan for 18 to 36 months. Unfortunately, the cost of all health insurance is up, including COBRA. Today, families are paying 80% more to hold onto their coverage than they did during the last recession back in 2001.
In order to qualify for COBRA, you must opt for it within 60 days of losing your job. The law is for companies with 20 or more employees. Some states may have different policies, such as a different time span or eligible companies of smaller than 20. You must keep your current health plan if you opt to choose COBRA coverage, but then may be able to switch plans when you are in COBRA. You are eligible to switch plans during open enrollment of active employees.
The cost of COBRA is the downfall. Usually active employees only pay 25% of their total health insurance premiums, while their employers pay the other 75%. Under COBRA, former employees have to be 100% of the premium plus a 2% administrative cost.
Another choice can be to seek coverage under a family member’s plan, such as a spouse. Even though it may not be open enrollment period, you may be able to join a spouse’s plan within 30 days after you lose your own employer coverage.
The next and possibly cheaper option is to buy coverage of your own. There are variety of plans out there today that are customized to fit your needs and lifestyle. Companies such as Aetna has teamed up with AARP to provide plans to help those “in between” people. Those “in between” people being early retirees that are not eligible for Medicare yet.
Rates and premiums vary depending on age and location. According to a Wall Street Journal article, the average annual premium was $2,613 for an individual, and $5,799 for a family, according to the industry survey. The costs may be lower but they also don’t usually offer the wide array of benefits that employer based plans have. You may pay higher coinsurance or copayments with the individual plan. Many individual and family plans have a lot of exclusions and limits, so when choosing a plan, read the fine print carefully.
One more option is Medicaid and State Children’s health Insurance program (SCHIP), if you are in the low income bracket. Medicaid is the largest source of funding for medical and health-related services for people with limited income. In order to for children to qualify for SCHIP, the family income must be twice the federal poverty level.
For Americans who have lost their jobs, not having any health insurance is not the way to go. There are several options listed about that can help you maintain coverage. If you liked the benefits you received from your previous employer, then opting for the COBRA plan may be the option to choose. If you want lower rates and to customize your own plan, then getting individual health coverage may be the option to go with. No matter what the circumstances, health coverage is a necessity.
Comments