Fellow Juicer Cain has had a bad week and raises a good question:
So, I just got laid off and my insurance ends in June. Any suggestions on how to get into a new health insurance plan pronto?
Really good question and there are a few options. My first recommendation after yelling at the sky and then getting a cookie (how I dealt with the first 10 minutes of getting laid off in 2009), is to talk to either a broker, an agent or a certified assistance counselor at some point in the next week or two. But here are the basic options:
The upside is no premiums. The downside is a lot of risk in case something does go wrong. Meteors happen.
If someone can pass underwriting, low premiums offer some protection. These plans will become more common in the very near future. The challenge is reading the fine print well enough to make sure that the coverage is actually useful coverage. This includes the Health Sharing Ministries.
COBRA allows someone to pay 102% of the premium to hold onto their employer sponsored coverage. Cost sharing is rolled over so you don’t restart paying your deductible. The upside is the transition is smooth as you keep the same exact plan you currently have. The downside is that this is extremely expensive. COBRA may be a good idea for people with significant medical expenses already incurred and expect to incur high expenses in the near future. COBRA, as part of an ERISA plan, is pure community rated. A 21 year old pays the same premium as a similarly situated 64 year old.
An individual losing coverage will receive a COBRA eligibility letter within two weeks of the triggering event. They have two months to elect coverage by paying premiums that retroactively initiate coverage to the date of coverage loss. This is a bit of a one way option where if someone gets a new job with coverage forty five days after the initial loss of coverage, they can effectively be covered by COBRA’s retro-activity provision without actually paying a premium.
Job loss and loss of insurance because of a job loss is Qualifying Life Event for the ACA Exchanges. Within 30 days of the triggering event (loss of insurance), you can go on the Exchange and buy a new policy. Depending on your income and family situation, you may be subsidized. Make sure you estimate your annual income as the income from the previous job, any unemployment benefits and some income from a future job so that you don’t get hit with a massive subsidy repayment next year. Out of pocket expenses start off at zero. ACA policies price at a 3:1 ratio for age. Older people will pay more if they don’t buy a plan that is underneath the bench or don’t qualify for subsidies.
ACA plans are probably a better choice for people in good health with little chance of medical expenses for the rest of the year. They are also probably a better choice than COBRA for younger people (<~45ish) than older people due to the age premium ratchet.
Now let’s see if we can help Cain and the rest of the Jackels who are or will soon be looking for work to find work.