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What to do if you lose your health insurance

11% of U.S. labor force out of work
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The historic surge in unemployment claims in the past three weeks — nearly 17 million people reporting job losses, or 10% of the U.S. workforce — has also caused an unprecedented increase in the number of uninsured Americans. 

Almost half of U.S. workers get health insurance coverage through their employers. That suggests as many as 1.5 million people have lost their coverage in the last two weeks of March alone, according to estimates from researchers at Harvard Medical School and Hunter College. That number could swell to 7.3 million by June 30 based on Federal Reserve estimates of the number of workers who are expected to lose their jobs in April and May. And these numbers do not include family members who may be covered under an employer-sponsored plan. 

The wave of suddenly uninsured people comes as the ongoing pandemic makes it paramount to have health coverage. So what can you do if you've recently lost your health insurance? Depending on your overall health and financial situation, one of these options may work for you.

COBRA 

This program, which gets its name from the Consolidated Omnibus Budget Reconciliation Act, allows you to extend your current employer-sponsored health insurance coverage for up to 18 months. Most employers with 20 or more full-time employees offer COBRA for former employees as well as spouses and dependent children covered under the employer plan. You typically have 60 days to sign up.

Here's the thing — COBRA is expensive. You'll be paying the full premium cost, including the portion of the premium your employer paid for you. Considering the average employer pays about 80% of the $6,896 average annual premium for individuals, you'll likely see a dramatic increase in premium costs, according to data from the Kaiser Family Foundation. You'll also be responsible for the administrative fees your employer previously paid.

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Some workers may find they can't afford not to have COBRA despite the high cost. That's because coverage will remain the same as it was when you were employed. 

"People who are in the middle of an expensive course of treatment and have already satisfied their deductible or need to keep their existing network of providers may make COBRA work," said Cheryl Fish-Parcham, director of access initiatives at the health advocacy group Families USA.

Affordable Care Act exchange plans

The newly unemployed can shop their state's ACA exchange to find new health insurance. Losing your employer-sponsored insurance is one of the qualifying events that allows you to sign up within 60 days of losing your job without having to wait for the annual open enrollment period at the end of the year. 

What's more, those who lose income may qualify for government-sponsored premium subsidies or cost-sharing programs available for exchange plan members. You can find out if you qualify at Healthcare.gov, where you will also be directed to your state's exchange options.

Make sure you are on the official Healthcare.gov site, warns Fish-Parcham, who has noticed several sites with similar names selling non-ACA compliant plans. She also points out that if you are already insured through the exchanges and have suffered a loss of income, you can apply for subsidies and/or move to another, more affordable plan outside of the traditional open-enrollment period.

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Since the coronavirus hit the U.S., there has been talk of extending the federal marketplace open-enrollment period to allow people who chose to forgo insurance in 2020 a chance to sign up for coverage in light of the pandemic. 

Although the Trump administration is against this idea, 11 states and the District of Columbia have established an extended special health insurance enrollment window for those impacted by the virus. (The states are California, Colorado, Connecticut, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont and Washington.)

All these states control their own health insurance marketplaces, so if you are someone who declined to purchase coverage during the 2019 open-enrollment period and you live in one of those states, you can purchase insurance on your state's exchange during their extended window periods.

Medicaid

If you've had a large decrease in monthly income, you may be eligible for Medicaid, especially if you live in one of the 36 states that have expanded Medicaid coverage to raise the threshold under which low-income people can receive benefits. 

"Unlike the exchanges, which base premium and cost-sharing subsidies on projected annual income, Medicaid eligibility is determined by monthly income," Fish-Parcham explained. 

"If you are recently unemployed, it makes sense to check if you qualify," she added. 

Other alternatives

If you are 65 or over and delayed signing up for Medicare Part B because you were still working and still covered by your employer's plan, you will be eligible for Medicare Part B sign-up if you've lost your employer coverage. 

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And don't overlook a spouse's or partner's plan. You may have chosen coverage under your own employer instead of your spouse's, but if you have lost your coverage you qualify for a special open-enrollment period under your spouse's plan, Fish-Parcham said.

As part of the ACA, adult children up to age 26 are eligible for coverage under a parent's plan. Young adults 25 and under who may have lost employer-sponsored health insurance may want to look into coverage under a parent's plan. 

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