People wait in their cars as they line up to collect unemployment forms in Hialeah, Florida.
CHANDAN KHANNA/AFP via Getty Images
Millions of workers have lost their jobs — and their employer-sponsored health insurance — due to the coronavirus pandemic.
But other options are available to those who lose health coverage. These include Medicaid, an Affordable Care Act marketplace plan, job-based coverage from a spouse or parent, short-term health plans and coverage under the Consolidated Omnibus Budget Reconciliation Act, known as COBRA. Uninsured kids may also get coverage through the Children’s Health Insurance Program, or CHIP.
Below, is an outline of each option and costs in more detail.
Size of the problem
But first, how big is the problem?
Employer-sponsored coverage is the most common form of health insurance for Americans.
Around 175 million workers and their dependents had coverage last year, according to a recent study published by researchers at the Employee Benefit Research Institute and W.E. Upjohn Institute for Employment Research.
In the spring, unemployment ballooned to levels unseen since the Great Depression.
That caused up to about 15 million people (nearly 8 million workers and 7 million dependents) to lose coverage through employer-sponsored health insurance as of June 2020, according to the joint EBRI-Upjohn report.
Many of these workers may have kept their insurance in the event of a temporary layoff, or furlough, researchers said. And others were likely able to find insurance elsewhere.
Roughly a third of those who lose employer coverage due to the pandemic this year will become uninsured, the Urban Institute estimated.
A rally against Medicaid cuts in front of the U.S. Capitol on June 6, 2017.
Bill Clark | CQ-Roll Call, Inc. | Getty Images
Workers should first consider Medicaid in the event of job loss, according to Karen Pollitz, a senior fellow at the Henry J. Kaiser Family Foundation.
Medicaid — public health insurance — will likely be the most comprehensive and affordable insurance option, generally with low (or no) premiums and deductibles for care, Pollitz said.
Workers can also enroll year-round and don’t have to wait for an open-enrollment period.
“Medicaid is a safety net for people when they have low income,” Pollitz said. “You just have to be having a hard couple of months [to qualify for coverage].”
The Affordable Care Act, or ACA, made it easier to qualify for Medicaid in many states.
Medicaid is a safety net for people when they have low income.
senior fellow at the Henry J. Kaiser Family Foundation
More than 60% of people who lose job-based coverage during the pandemic may be eligible, the Kaiser Family Foundation estimates.
In states that expanded Medicaid under the ACA, individuals with income below 138% of the federal poverty level can generally qualify. (That equates to roughly $1,500 a month for single people.)
It’s more difficult to qualify in the dozen or so states that didn’t expand Medicaid, Pollitz said.
Medicaid only considers current income, rather than income earned earlier in the year. That makes it more likely that newly unemployed workers can qualify based on their current financial situation.
There also isn’t an asset test that disqualifies those with retirement savings, for example.
Insurance via spouse or parent
Around a third of workers who lose a job during the pandemic will get insured through a family member, according to an estimate from the Urban Institute.
Children can remain on a parent’s health plan up to age 26 per the ACA. More than 2 million have coverage through this provision.
Workers who lose employer-sponsored coverage can also buy private insurance via marketplaces offering plans through the ACA — also known as Obamacare — at Healthcare.gov.
These are comprehensive health plans that cover doctor and hospital visits, prescriptions and maternity care, for example.
Nearly 11 million Americans had coverage through these exchanges as of March, according to the Department of Health and Human Services.
KAREN BLEIER | AFP | Getty Images
There are four tiers of health plans (bronze, silver, gold and platinum) available through these exchanges. Tiers offer different levels of premium and out-of-pocket costs.
For example, a bronze-level plan carries a $6,500 annual deductible before an insurer starts paying for care, according to Kaiser. Those deductibles are around $4,500 for a silver plan, $1,500 (gold) and $28 (platinum).
(This analysis is for the average person in 2020 who has a health plan with combined medical and prescription drug deductibles.)
As a trade-off, plans with higher out-of-pocket costs for care generally carry lower monthly premiums.
The ACA extends cost-sharing subsidies and premium tax credits to help make insurance and care more affordable for consumers.
Tax credits to help lower monthly premiums are available to consumers with annual income between 100% and 400% of the federal poverty level, which is $12,760 for singles and $26,200 for a family of four this year.
Marketplace plans had a $576 monthly premium, on average, in February, according to the Department of Health and Human Services.
However, the average person got a $492 tax credit — resulting in a net premium of $84 a month.
More than 9 million people, or 86% of people who bought a marketplace health plan, got a premium tax credit, according to HHS.
Consumers can also reduce out-of-pocket costs for care via subsidies, available to those with annual income between 100% and 250% of the federal poverty level. These subsidies are only available for silver-tier plans.
A single person at the poverty line would see their annual deductible fall to about $210, on average, from $4,500, courtesy of those subsidies, according to Kaiser.
Unlike with Medicaid, eligibility for premium tax credits and cost-reduction subsidies is based on the entire year’s income.
The ACA open enrollment period for next year starts Nov. 1 and ends Dec. 15.
COBRA allows workers to continue with the same insurance plan they had through their employer, generally for up to 18 months.
“It’s expensive, and particularly expensive for someone losing a job,” said John Graves, an associate professor of health policy at Vanderbilt University.
That’s because employers would no longer subsidize the cost.
Single workers paid $1,243 a year for employer-sponsored health insurance in 2020, according to Kaiser. Employers paid the rest of the $7,470 total premium. (For family coverage, workers paid $5,588 of a $21,342 annual premium.)
Unemployed workers would be on the hook for 102% of the entire annual premium through COBRA.
It may make sense to continue the coverage if workers can afford to, Graves said.
Any out-of-pocket expenses applied toward an annual deductible would remain, and in-network providers would be the same, for example.
Short-term limited-duration plans pre-date the ACA and are generally only meant to cover catastrophic coverage (hospitalization, for example) for a few months at a time, Graves said.
They generally come with skimpier benefits than ACA plans, and those with pre-existing conditions may not qualify, he said. Insurers might not cover costs associated with Covid-19, depending on the policy, he said.
But the monthly premiums are generally low.
“If you’re healthy and need coverage for a month, couldn’t afford it if you got in a huge car accident, but you could put off primary-care visits for month or two, it is an option, and a cheap option for people,” Graves said.
Most children who lose insurance due to a parent’s unemployment will be eligible for CHIP, according to Kaiser.
The program offers health coverage to uninsured children (under 19 years old) in families with incomes too high to qualify for Medicaid.
Income eligibility varies by state, but can range up to around 400% of the federal poverty level.