COVID-19 has unleashed two competing emergencies in the U.S. -- we face both a health crisis and an economic crisis. While stay-at-home mandates are slowing the spread of the virus, they're also causing millions of Americans to lose their jobs as businesses remain shuttered. Unfortunately, job loss usually also means loss of health insurance, which is problematic in the midst of a pandemic.
As states start to reopen and economic activity resumes, it's critical to maintain your health coverage. COVID-19 will continue to be a threat; the CDC is even predicting a stronger, second wave next winter. As well, the stress of losing your job and having to make ends meet in unconventional ways can also compromise your immune system and increase your risk of getting sick.
As to how you should maintain your health coverage, you do have three options. You can stay on your former employer's health plan through COBRA, you can purchase a plan on the healthcare marketplace, or you can join your spouse's workplace plan.
COBRA is a federal program that allows you and your family to continue on your employer's healthcare plan after you leave your job. Any employer who had more than 20 employees on its plan in the prior year is legally required to offer COBRA insurance to recently separated workers.
A major point of confusion about COBRA insurance is cost. You'd think that continuing on your employer's healthcare plan would cost you the same as it did while you were working. Unfortunately, that is not the case. The health insurance deductions taken from your pay only covered a portion of your premiums, usually less than half. If you elect to use COBRA, you are responsible for the entire premium plus a 2% fee.
Those premiums can be shockingly high. A study by the Kaiser Family Foundation reports that average annual individual healthcare premiums in 2019 were $7,188. Family coverage premiums were $20,576. Add 2% to those numbers, and that equates to monthly COBRA costs of $610 to $1,750.
You should receive notification in the mail detailing your options under COBRA within 30 to 45 days of your last day of work. If you choose to accept the coverage, it will be retroactive to that last day. You'll owe premiums back to that date, too.
Thankfully, the healthcare marketplace should have more affordable options. The marketplace was developed after the enactment of the Affordable Care Act in 2010 to provide a range of health insurance options for individuals, families, and small businesses. Normally, you can only enroll in a marketplace plan between November 1 and December 15 of each year. But leaving your job, voluntarily or otherwise, qualifies you for a special enrollment period. That special enrollment period lasts for 60 days from the date you parted ways with your employer.
You can preview plans and estimated premiums by providing your zip code, along with some demographic and financial information. In my zip code, full-priced plans for an individual aged 35 have monthly premiums ranging from $335 to $610. The lower-priced plans have deductibles as high as $8,150 and coinsurance as high as 50%. Coinsurance is the portion of the bill you're responsible for after you reach your deductible.
Don't write off those premiums as too high, however. Your income may qualify you for lower rates. When you apply, you'll also find out if you're eligible for free or low-cost Medicaid coverage.
If you're married, enroll in your spouse's plan
Employer plans should offer an enrollment period of at least 30 days for spouses who've lost coverage. If you're married and your spouse works, reach out to your spouse's plan administrator for a cost estimate and the enrollment deadline. You might need to supply some documentation of your marriage and job loss to your spouse's employer. But it'll be worth the paperwork. Of your three coverage options, this one should be the cheapest.
Take care of yourself
Keeping your health insurance in force is an important self-care step, but there are other actions you can take, too. For example:
- Get enough sleep. If stress is keeping you up at night, try meditating or listening to relaxing music. You can find hours of music optimized for sleep on YouTube.
- Cut back on sugar. Too much sugar in your diet has negative effects on your mood, your kidneys, your joints, your liver, and your heart. Eating lots of sugar also causes you to crave more sugar.
- Eat right. Maintaining a healthy diet is challenging when cash is tight. One thing works in your favor, though: You can replace expensive and fatty meats with healthier, cheaper things like tofu, beans, quinoa, and eggs. You can also lean on affordable veggies, including broccoli, cabbage, and sweet potatoes.
- Stay up on exercise. Exercise is a proven stress reliever. Keep your routine light and low-impact to avoid injury. Try stretching, walking, and light hiking.
- Continue to practice social distancing.
- Wash your hands often and avoid touching your face.
These healthy living habits can help minimize your out-of-pocket healthcare expenses. Unfortunately, there isn't much to be done about the cost of healthcare premiums. Enrolling in your spouse's plan is the cheapest option, while COBRA will be the most expensive. The healthcare marketplace should have mid-range options, although the deductibles and coinsurance may be less appealing.
Whatever you do, don't ignore the issue of health insurance. Enrollment periods for COBRA, the marketplace, and spousal plans usually end within 30 to 90 days after your last day of work. If those deadlines pass, you'll have to find a private healthcare plan, at least until the marketplace enrollment period opens again in November.