This analysis is part of the USC-Brookings Schaeffer Initiative for Health Policy, which is a partnership between Economic Studies at Brookings and the University of Southern California Schaeffer Center for Health Policy & Economics. The Initiative aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings. This post was updated to include new information about how Unemployment Insurance and other benefits affect eligibility for health insurance programs.
More than 50% of Americans get health insurance through their own or a family member’s job. As people practice social distancing and the economic effects of COVID-19 begin to be felt across the country, some families who are currently insured may lose job-based health insurance in the coming weeks or months because they lose their job or see their hours reduced. But this can be a particularly scary time to become uninsured. The good news is that most people who lose insurance have the option to get subsidized, comprehensive coverage, and coverage is often more affordable than people are expecting.
This post first explains the types of comprehensive coverage people can qualify for and then explains how to sign-up. Families should plan to act fast –in many cases, the deadline for getting coverage is 60 days after the family’s old coverage ends, and health care costs often will not be covered until people sign up. Anyone who is not sure where to start should visit www.HealthCare.gov to find out more.
What coverage can families without job-based coverage qualify for?
Everyone’s circumstances are different, but in general people can qualify for a few different kinds of comprehensive coverage in the aftermath of losing a job and job-based coverage.
An initial assessment of the kind of coverage a family qualifies for requires three pieces of information: 1) the state of residence, 2) the household’s monthly income right now including some (but not all, see chart below) of their unemployment insurance benefit, 3) the household’s projected annual income for the entire calendar year, including from earnings before losing a job, from all unemployment insurance, and from income they expect to earn at a new job later in the year.
Monthly income and annual income are calculated according to different rules, which are particularly confusing because of some new rules related to COVID-19:
An estimate of monthly and annual income allows an assessment of what coverage a household may be eligible for.
- Medicaid expansion coverage. In most states, people with low incomes can qualify for Medicaid. In 37 states, Medicaid is available to anyone with income below 138% of the Federal Poverty Level ($17,609 per year for an individual, $36,156 per year for a family of 4, or 138% of the amount for your specific family size here). Medicaid is usually free, or requires only a nominal premium, and a family can sign up at any time.
Medicaid eligibility is based on a household’s current monthly income, including some, but not all, of their unemployment insurance, as described above. It doesn’t matter how much a household was making before they lost their job and their job-based insurance; Medicaid considers the new income level. A single person with currently monthly income below $1467 (1/12th of $17,609) or a family of four with current monthly income below $3013 (1/12th of $36,156) will qualify. (This includes people with no income.)
Medicaid expansion is available right now in the following states: Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Utah, Vermont, Virginia, Washington and West Virginia.
- Other Medicaid coverage. Some people with incomes too high to qualify for Medicaid or who live in states that have chosen not to expand Medicaid might still qualify for Medicaid. This is especially true for children, pregnant women, and, to a lesser degree, parents. Find the limits for each state (which are also based on currently monthly income) here, here, and here.
- Subsidized coverage in the individual market. The vast majority of people that do not qualify for Medicaid will qualify for subsidized coverage in the individual market. Subsidies are available in all 50 states and can be very generous; in 2019, people who signed up and received subsidies paid an average of just $87 per month for coverage. In fact, millions of people qualify for coverage that requires no premium payment from them at all.
Subsidies are calculated based on how much money a household expects to earn for the entire calendar year. A household must expect to earn a minimum of 100% of the Federal Poverty Level ($12,760 per year for an individual, $26,200 per year for a family of 4, check your specific family size here) for all of calendar year 2020 to qualify. Remember that this includes money earned before losing a job, all money received while out of work, and money one expects to earn when they are back to work.
The lower a household’s projected income the more generous the available subsidy. Subsidies are not available for those with projected income above 400% of the poverty level, but those families can still sign up and pay the full premium. The amount of assistance a household receives will be “reconciled” based on the final income it reports on a tax return for 2020, so people who guess an income too low will have to repay some of their subsidy, while people who project an income that is too high will get extra money back.
Most households have just 60 days after losing their job-based coverage to sign up.
- COBRA coverage from a job. Employers are required to offer families the option to “continue” in their job-based coverage, with the family responsible for paying the full premium. The premium varies across employers, but for an employer that offers a plan with the national average premium, COBRA will cost an average of about $610 per month for a single person or $1750 for a family. COBRA will usually be much more expensive than other options available to families, and people should look at other choices before signing up. People have 60 days after they lose their job-based coverage to sign up for COBRA, and can enroll by contacting their employer’s HR department directly.
How can people sign up for coverage?
In general, anyone can visit www.HealthCare.gov to start the process of signing up for coverage. Most people who have lost coverage due to a job loss will qualify for a “Special Enrollment Period” and can follow the appropriate prompts at HealthCare.gov. But there are some tips that may make the process go more smoothly.
- People who think they qualify for Medicaid. If the entire household qualifies for Medicaid, the fastest way to get coverage is likely to start out at the state Medicaid agency’s website. Applicants can follow the state processes (generally using a state-specific website) to get covered, and will be asked for eligibility information including their social security number and current monthly income. Many people will need to provide proof of their address and their currently monthly income, so it may be helpful to gather documents like a utility bill and a notice about benefits from unemployment insurance. People can sign up for Medicaid at any time.
- People who think they qualify for subsidized coverage in the individual market. Those who expect to qualify to buy coverage in the individual market should visit HealthCare.gov. (For some states, applicants will automatically be redirected to the website for their state, but most people will use HealthCare.gov).
Applicants will be asked for eligibility information like their social security number and projected income for the entire calendar year, as well as the date they lost (or will lose) employment-based insurance. People may be asked to provide documents showing how they arrived at their projected annual income (like old pay stubs, information on unemployment insurance, or even a letter explaining how they expect their income to change over time). In most states they will also need to provide documents showing that they previously had employer-based coverage, like a letter from their old employer or insurer. Applicants have 90 days to provide proof of income, if requested, but will need to immediately provide information about previous coverage; it is helpful to gather both kinds of documents in advance.
In nearly all states, families have 60 days from the last day of their employer-based coverage to sign up. (A few states are letting people sign up anytime because of the COVID-19 emergency; find out more here.)
- People who need help. Many non-profit “assisters” and insurance agents and brokers have been certified to help people apply for coverage. A searchable database by zip code is available at HealthCare.gov. (For people who think they may be eligible for Medicaid, assisters are likely to be able to provide more detailed information than agents and brokers, and the website can be sorted to include only assisters.)
- What not to do. There are three mistakes people should avoid:
- Don’t visit imposter websites. Unfortunately, some websites that sell various forms of non-comprehensive coverage can be misleading for consumers, especially amid COVID-19. Families that want to get comprehensive coverage should always use a .gov website.
- Don’t wait too long to apply. Many people have just 60 days to sign-up.
- Don’t forget to provide required documents. People signing up for coverage may be asked for documents about their address, their income, and when they lost coverage. People who don’t provide that information quickly may not get coverage, so families should gather as much as possible ahead of time and respond promptly.