Can you get health insurance if you don’t have a job that offers it as a benefit? Absolutely. Good quality health insurance is available at all income levels—even with no income. Here’s a state-by-state guide to health insurance that will get you started. Below are seven options to consider.
What You Need to Know
Health insurance you buy without your employer’s help doesn’t have to be expensive. Check out this list of highly recommended healthcare insurance companies.
Acquiring good health insurance can protect your financial health. Nearly 60% of all debt collections are the result of medical bills, the U.S. government’s Consumer Financial Protection Bureau says.1
Health insurance pricing and availability is regional—right down to the county level. That’s why your state insurance department is a great place to turn for assistance if you need additional help finding health coverage.
Perhaps you have recently lost your healthcare because you lost your job. Or the person on whom you depended for health insurance lost his or hers. In either case, one way to replace your insurance is through COBRA (the Consolidated Omnibus Budget Reconciliation Act), which gives people the right to remain enrolled in their old employer’s group health plan by paying for it out of pocket; in nearly all cases the employer no longer contributes.2
The best thing about COBRA is that your previous healthcare plan won’t change, and you could keep it for up to three years, at least for your dependents. That might be important if you or a loved one have been receiving specialized care for a serious illness. COBRA is also a good short-term option If you have already landed employment that will offer healthcare after a waiting period passes. The downside is that a former employer will almost certainly no longer pay part of the cost, so the amount you have to pay could rise significantly, perhaps even by 80%.
Your employer is obligated to notify your healthcare insurer that you are eligible for COBRA. You have 60 days to make up your mind and pay the required first monthly premium. Under some circumstances, there may be financial assistance available. The same is true for your spouse or parent, if you were covered by their insurance.
If you lost your health insurance because you or someone else lost a job, check out COBRA first. The cost could be daunting, but if you don’t expect to need it for long, it is the easiest way to get insurance uninterrupted. On the other hand, if you’re laid off, your suddenly low income may qualify you for an Affordable Care Act policy with substantial government subsidies (more below).
One word of warning: If you expect to qualify for Medicare within a few months, don’t rely on COBRA past your Medicare eligibility date because you could find yourself paying an ongoing Medicare penalty.3
No one should go without some form of health insurance, given the variety of coverage options that are available.
Affordable Care Act (ACA)
The Health Insurance Marketplace offers so-called Obamacare health plans that meet the generous requirements of the ACA. People can’t be refused insurance or charged more because they have a preexisting condition—a boon for many.4 Depending on your income, you’ll probably qualify for a premium discount (or “subsidy”) and perhaps lower coinsurance costs, as well. You can calculate your eligibility here.
To buy a plan, contact a health insurance broker or go directly to the Marketplace website. There is an Open Enrollment Period each fall for getting coverage or updating a plan. The window to enroll is between November 1 – January 15 in most states.
If you miss that window, you may qualify for an immediate 60-day Special Enrollment Period if you lose your prior coverage, give birth or adopt a baby, or get married.
ACA plans can be a bargain, especially if you are among the 84% who get subsidies that sometimes reduce their premiums by two-thirds to around $100 a month.
Individual Private Health Insurance
Insurance companies are allowed to sell insurance policies to you that don’t meet the requirements of the ACA. Some of these policies are considerably cheaper for people who don’t qualify for ACA discounts, but they typically don’t offer many of the 10 essential health benefit protections covered in all ACA plans. You can buy private insurance through brokers and directly from health insurance companies. They are sold year round and can be good for people who only want low-premium preventive and emergency coverage, or for those who don’t meet the requirements to purchase insurance during ACA enrollment periods.
A Word of Advice
Carefully consider your healthcare needs before choosing: Some inexpensive insurance plans may have limitations on coverage you need, including for preexisting conditions.
High-Deductible Health Plans
High-deductible health plans (HDHPs) are what they sound like—the policyholder pays a significant amount (the deductible) out of pocket before coverage kicks in. To get tax benefits, the IRS requires that the deductible be at least $1,400 for an individual or $2,800 for a family. But some deductibles climb to five figures. These plans are sold through the ACA and as private health insurance. If you buy one in conjunction with a health savings account (HSA), and stay healthy, you can save a considerable amount tax free as long as you ultimately spend the money on healthcare. Anything you don’t spend remains in your HSA account from year to year, and it can be invested tax free. These plans can be advantageous for people who do not develop chronic conditions because the HSA’s ultimate balance can fatten a retirement plan.
Short-Term Health Insurance
These largely preventive and emergency policies, offered in many but not all states, can get you over the hump from one employer insurance to another, from employer insurance to Medicare, or in other circumstances where you need coverage for three months to a year. Many of these policies have significant coverage limitations and dollar caps on total coverage. Claims may result in cancellation, too.5 Check out these recommended policies. By definition, this type of insurance isn’t a long-term solution, but it might be a short-term bridge to comprehensive coverage, perhaps at your next job.
Medicaid and Children’s Health Insurance (CHIP)
State and federal governments both kick in to pay for these programs, which provide free or low-cost healthcare for low earners, some disabled people and children up to age 19. In recent years, 38 states and the District of Columbia have expanded their Medicaid programs to provide care for all people who earn below a state-defined poverty level, often 138% of modified adjusted gross income (MAGI), as defined by the federal government. Others consider assets and define eligibility more narrowly. Use this questionnaire to see if you are likely to qualify.
Some adults who live in the12 states that haven’t expanded Medicaid may find themselves earning too little to qualify for ACA coverage but too much to qualify for Medicaid.6 Finding work, even self-employment (think selling odds and ends like used golf balls online) could increase your reported income above the minimum, and help you get around this problem.
This program provides health insurance for people 65 and over. Some people with disabilities, including permanent kidney failure, can qualify at younger ages.7 Original Medicare pays around 80% of beneficiaries’ medical bills, so most people also buy Medicare Supplement Insurance, also known as Medigap, to pick most of the remaining 20%. Others buy all-in-one Medicare Advantage plans, which are regulated by the federal government but sold and managed by private insurance companies, including Humana, United HealthCare and Anthem.
These programs and the rules that govern them are complicated, so carefully consider your options when first purchasing a plan. You can face problems, for example, if you don’t act during your initial enrollment period as you turn 65. For one, it can be difficult to switch from Medicare Advantage to Original Medicare after your initial Medicare enrollment period without incurring extra costs. Also, Medigap companies in your state may be allowed to reject you if you have preexisting conditions.8
Gambling that you’ll stay healthy and won’t need health insurance is a lousy bet. Shopping for decent health insurance can appear daunting. But if you use this guide to evaluate your options, you can probably find affordable insurance of one kind or another. If you need additional information, contact your state’s insurance department for assistance.