Via @AP: Pennsylvania’s Department of Labor and Industry said unemployment compensation claims were 50,000 on Monday, and Tuesday’s filings were on course to exceed that. In the entire first week of March, the state received barely 12,000 claims, according to federal data.
— Marc Levy (@timelywriter) March 17, 2020
Pennsylvania is not unique. Ohio is having a similar spike in claims. Every state that is shutting down this week will have a similar spike. The states that have not shut down this week will have a spike next week when they shut down. And then there is another wave of secondary lay-offs coming as firms that have a little bit of work available for their current work force run out of work and cash stockpiles in the next couple of weeks.
When one is laid off, there are five major insurance possibilities:
- Go uninsured
- Attempt to qualify for Medicaid or CHIP as appropriate
- Go on Exchange
- Go underwritten
- Continue COBRA
I strongly recommend against going uninsured during a pandemic. Medicaid will have the lowest premium and lowest cost sharing if you qualify. Income qualified Medicaid looks at monthly income. So if you had a job that paid really nicely in January and February, and not a lot of income in April, you can qualify on your April income. This is especially important in the states that have expanded Medicaid due to the ACA (Minnesota and New York Residents, you will also look at the Basic Health Program).
ACA exchange coverage is available as a special enrollment period due to loss of insurance through work. Income qualification is based on estimated annual income. Estimate something reasonable (however what the hell is “reasonable” is one hell of a good question right now) but make sure you estimate over 100% FPL if you live in a non-expansion state. If you are mainly worried about getting hit by a bus or covering ICU stays, the cheapest plan with a network that you like may be a good choice. Your out of pocket expenses start over again at zero.
Underwritten coverage can be a decent choice at a lower premium if you can pass the underwriting, can read the fine print AND are unlikely to get ACA subsidies. Just be careful and stick with products that are actually regulated by the state insurance commissioner. Avoid plans that are explicitly “NOT INSURANCE!”
Finally, COBRA is tough. You pay full premium but if you have already spent a lot of out of pocket expenses already, those carry over. The quick rule of thumb is that COBRA will be look better relative to the Exchange the older you are if you do not qualify for subsidies. Once subsides are thrown into the mix, there are a few situations where COBRA will be better, but I would bet on the Exchanges being attractive more often than not.
Good luck and as you have questions, e-mail me or let’s hash them out in comments.