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Going without health insurance could mean facing sky-high medical bills. Read on to learn about your options when you lose your health coverage.
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Many people rely on their employers to provide them with health insurance. So if you lose your job or are forced to quit, you might lose your health insurance coverage, too.
Going without health insurance could mean facing extraordinarily high medical bills — bills that leave you with mountains of medical debt. So it’s generally not a good idea to go without any sort of health coverage.
Fortunately, when you lose your employer-sponsored health insurance, you generally have the option to retain it for a period. The bad news is that retaining employer health insurance can be prohibitively expensive in its own right.
How COBRA works
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers the right to retain their group health insurance after separating from the employer that provided that coverage. If you’re part of a group health plan covering 20 or more employees, you’ll generally be eligible for COBRA once you lose your health insurance. From there, you’ll be able to keep your existing coverage for up to 18 months in most cases, though there can be exceptions.
The upside of COBRA is that you get to keep your health insurance when it would otherwise go away. The downside is that under COBRA, you’re required to pay your entire premium yourself. And that could be ridiculously expensive.
Remember, many employers subsidize the cost of health insurance for their employees so that if, for example, you’re having $200 a month deducted from your paycheck to cover your portion of your premium, there’s a good chance your employer is kicking $300, $400, or more toward your coverage at the same time. As such, many people who lose their health insurance can’t afford COBRA.
When COBRA costs too much
Even if you have money in savings, you may find that you can’t afford coverage under COBRA. In that case, you can sign up for health insurance through healthcare.gov. You can also see if you’re eligible to join a spouse’s health plan (this option will only be on the table if you’re married and have a spouse who’s entitled to insurance through their job).
There are different tiers of coverage you can buy independently through healthcare.gov. Bronze is the lowest tier of insurance — meaning, you’ll generally pay the lowest monthly premium for a bronze plan. But your out-of-pocket costs under one of these plans may be higher.
The next level up is silver, followed by gold and platinum. The higher the tier, the more expensive your health insurance premiums are likely to be. But the more you spend on premiums, the less you’re likely to spend on bills like deductibles and copays.
Ultimately, you’ll need to think about your health and how much you can afford. If you’re someone who rarely gets sick, a bronze plan might be a good choice. This way, you have coverage in the event of a major illness or accident, but you’re not necessarily shelling out a ton of money in premiums for coverage you may not end up using so much.
It’s unfortunate that for many people, their health insurance is tethered to their jobs. When you lose your health insurance, it’s important to find a way to put coverage in place, whether by paying for coverage under COBRA or buying your own plan. Once you get a new job, you may be eligible for health insurance through your employer. But until then, it’s important to bridge that gap.
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