Before the government decided to kick in 65 percent of the premium for people who extended their employee group health insurance after being laid off, many experts considered the COBRA provision to be a "cruel option." Without the subsidy, for example, average monthly COBRA premiums for family coverage ($1,111) would devour close to 84 percent of the average person's monthly unemployment check, according to a report released in December by the nonprofit Families USA. Even with it the 65 percent cushion, which has no doubt been a boon for many Americans—especially those with pre-existing health conditions—a family policy could still cost $300 to $400 a month, "and that's a lot more than a lot of people have," says Karen Pollitz, a research professor at Georgetown University Health Policy Institute. "[It's] like offering a 10-foot rope to someone who is in a 20-foot pit."
Whether you can still make use of the COBRA subsidy or not, anyone suffering a job loss will undoubtedly be looking to save money on healthcare. Here are some ideas to consider if you're interested in finding other insurance coverage or in accessing more-affordable care:
1. Affordable Coverage
After COBRA. With or without the subsidy, if you chose COBRA, there's an option once your benefits dry up (or your company goes under and you lose your group coverage): special conversion individual plans protected by the Health Insurance Portability and Accountability Act, or HIPAA, says Ankeny Minoux, president of the Foundation for Health Coverage Education, a nonprofit. And if you qualify, either because you've exhausted your COBRA benefits or your company failed and you've had coverage for the previous 18 months, you can't be denied insurance because of your medical history, she adds.
"Mix and match." Many people don't realize that it's not all or nothing with COBRA—you don't have to elect it for everyone in your family who was covered under your former employer's group plan, says Minoux. If one person (or more) has a health condition and needs ongoing care, you can elect COBRA coverage for him and find alternatives for the rest of the family. That may be one way to save, she says.
On your own. Looking for coverage in the private market may offer savings, says Minoux, although she advises sticking with the main carriers so as not to be scammed. Websites like ehealthinsurance.com allow people to do side-by-side comparisons of different plans from many carriers and, if the wish, apply online. But being accepted is no slam-dunk, cautions Pollitz. Except for in a "handful" of states, that insurance is medically underwritten, meaning you'll have to fill out an extensive questionnaire about your health status and history. "Literally, just a hair out of place could be trouble," she says. "People get turned down for hay fever, for acne." If you do get sick and make a claim, "there's been a terrible problem with [cancellation]," she adds. Whatever you do, advises Minoux, don't lie on your application, as you could be denied down the road if the lie is revealed.
So-called high-deductible plans linked to a health-savings account may be appealing, since monthly premiums are typically lower and pretax money can be put away to accumulate and go towards medical expenses. But if you don't have the money to pay for care until you meet the deductible—when insurance kicks in—you could be on the hook for a lot more than you bargained for, warns Cheryl Fish-Parcham, Families USA's deputy director of health policy. As funds become available, however, you can reimburse yourself from your HSA, says Minoux: Individuals are permitted to contribute up to $3,050 and families up to $6,150 pretax each year. If not spent, funds roll over and accrue year-to-year, she says.
Pre-existing health conditions. If you have a pre-existing health condition and can't get coverage in the individual market, numerous states guarantee coverage through their high-risk pools. However, premiums can be as high as or even higher than under COBRA, depending on the state, experts say. This guide from the Kaiser Family Foundation has more information.
Other public programs. Of the roughly 46 million Americans without health insurance, approximately 12 million are eligible for public programs such as Medicaid but just aren't signed up, Minoux says, citing Congressional Budget Office data. It can be a slog to figure out if you qualify, and programs vary by state, says Minoux, whose foundation has made that a bit simpler. Take its five-question eligibility quiz to get a personalized list of your options. The Foundation for Health Coverage Education's Health Care Options Matrix will chart out all the public and private options available in your state. Click on your state in this map. Families USA also has state-by-state guides for help. Additional information can be found on this consumer website from Pollitz's group.