Health Insurance Options Amid Pandemic

For the tens of millions of Americans who have lost their jobs, there is another frightening reality to absorb: amid a global health pandemic, they no longer have health insurance. This is one of the big problems with having insurance linked to a workplace plan, but for more than 156 million Americans, or just under half of the country’s total population, that’s the coverage they have.

According to healthcare advocacy group Families USA, layoffs between February and May meant that 5.4 million workers lost their health insurance coverage, “an increase nearly 40 percent higher than the largest previous annual increase in uninsured adults ever recorded.” If you suddenly find yourself uninsured, there are three choices for coverage: COBRA, the Affordable Care Act, and Medicaid.

Let’s start with COBRA (Consolidated Omnibus Budget Reconciliation Act), the federal rule that requires group health plans “to provide a temporary continuation of group health coverage that otherwise might be terminated” for employees, their spouses, former spouses, and dependent children. COBRA allows you to keep your employer’s plan, usually for up to 18 months, which is the good news. However, without your employer chipping in to defray the cost of insurance, COBRA usually comes at a steep cost.

Some big firms are willing to negotiate severance packages, which can incorporate extra money for COBRA, but those types of deals are usually reserved for high paying jobs. Still, it never hurts to ask. For most, COBRA may be a good idea if there is another source of income, like a spouse or family member, who can help pay the bills.

The next option is coverage through the Affordable Care Act (ACA), which offers a special enrollment period (SEP) for those who lose their jobs. Because many people are worried about the cost of ACA, remember that if your income is between 100 to 400 percent of the Federal Poverty Level (FPL), you may qualify for subsidies, which can lower your monthly premium for a Marketplace plan. In 2020, the subsidy range is from $12,490 for an individual and 25,750 for a family of four at 100 percent FPL, to $49,960 for an individual and $103,000 for a family of four at 400 percent FPL.

The last option is Medicaid, the joint federal and state program that, together with the Children’s Health Insurance Program (CHIP), provides free or low-cost health coverage to over 72.5 million Americans. It is the single largest source of health coverage in the United States. Medicaid provides health coverage for some low-income people, families and children, pregnant women, the elderly, and people with disabilities. In some states the program covers all low-income adults below a certain income level. To see if you qualify, visit your state's Medicaid website or complete an application in the Health Insurance Marketplace.

Finally, a quick word about premiums for the upcoming year: you may have heard that some insurance companies are making money hand over fist during the pandemic, but that doesn’t mean that they are going to pass along those profits to you, in the form of lower costs.

A Kaiser Family Foundation analysis found proposed 2021 rates in the ACA exchanges of 10 states and the District of Columbia showed a median increase of 2.4 percent, though the changes are all over the map, the range is a 12 percent decrease to a 31.8 percent increase.

Kaiser notes that the proposed premiums for ACA marketplace plans do not affect job-based coverage, but they may indicate how the pandemic is affecting premiums generally. Most industry experts believe that health insurers plan to keep any profits on hand, in case the virus creates another wave of big claims.