Caroline Brehman/CQ Roll Call via AP Images
Conducting a drive-through COVID-19 test at George Washington University last Tuesday
Losing your health insurance when you lose your job is confusing in the best of times and even more so during the coronavirus crisis. In addition to needing to deal with all the inherent complexities of our system, there are now numerous additional economic, political, and health factors that make it very difficult to know what is financially the best choice.
Inherently, we don’t know how quickly different parts of the economy will recover, or if there will be some second wave of infections that causes new rounds of job cuts. To make matters worse, we have no idea if Congress will adopt a plan to cover payroll for most companies, subsidize COBRA, allow the temporarily improved unemployment insurance benefits to run out this summer, or do nothing. This makes it nearly impossible to strategize about the best option for health insurance in the event of a sudden loss of coverage, in the midst of a pandemic.
Since almost all employers provide insurance plans with different designs, and basically everyone who uses the Affordable Care Act exchanges will have to face significantly different options and prices based on their location and age, it is impossible to create a truly universal guide to choosing where to consider getting insurance. If you end up needing to get coverage on the exchanges, you will need to consult a whole separate guide for how best to compare all those options. The following flowchart is just meant to provide a basic but imperfect guide to the major factors a regular person who lost their job and employer coverage should consider. That includes the questions, the predictions about their own health in the near term, the guesses they need to make about the economic viability of their former employers, and the bets they need to make about what they think Congress will do. It’s also, most importantly, a demonstration of what a mess the situation currently is. And this is actually a simplified version for adult citizens. There are many potential factors, like if you have children who might be separately eligible for the Children’s Health Insurance Program, which would make the chart significantly more complex.
If you take away only one piece of advice, it is to check with your state Medicaid office to see if you qualify. You might be surprised, since the extra $600 a week you should be receiving in unemployment benefits doesn’t count against qualification, and eligibility for Medicaid is based on monthly income, unlike subsidies for exchanges, which are based on annual income. If you live in a state that expanded Medicaid and you do qualify, this will often be your best option.
If you believe you might be better off with COBRA after comparing it against your exchange options, it is often best to hold off on paying for it. When you lose employer coverage, you have a 60-day window to elect to take COBRA. You can be fully covered by your old employer plan retroactively during this time as long as you pay all your premiums for it by a set date. So if you do end up needing treatment, that can still be covered before you actually pay the premiums for that coverage. This window has recently been extended for an unspecified period of time, until the end of the “Outbreak Period.” You also have 60 days to apply for a special enrollment period to get ACA-compliant coverage after you lose your old insurance.
As a public service, I have also provided a separate set of flowcharts on how to navigate the acquisition of insurance coverage in other developed countries. Because health insurance is in general not tied to employment in these countries, the process is slightly less taxing. Note that Japan does still have some ties to an employer-sponsored insurance system, but workers can also sign up for national health insurance there if they lose their coverage.
Under a Medicare for All system, the manner of obtaining coverage in the event of job loss would look like the above. Virtually any system in the world is preferable to what Americans currently face in their mad, complex scramble to get covered.
