Many times, losing your job also means losing health insurance; here’s a guide to replacing your employer-paid coverage

Community Health News Service

The growing numbers of unemployed Americans – likely to hit 20 million or more due to the coronavirus – bring with them a loss of employer-provided health insurance coverage. The pandemic has laid bare the deficiencies in America’s main vehicle for providing health insurance.

The system, which grew up after World War II as a way to attract workers, had already begun to decline. Over the past 20 years the share of non-elderly Americans covered by job-based insurance dropped from 68 percent to 57 percent, and the drop has occurred in the heart of the middle class: all income groups below $104,800 for a family of four and about $51,000 for a single person.

Those grim statistics raise a crucial question: How will middle-income people who are laid off be able to pay for insurance on their own, let alone the deductibles, coinsurance, and co-payments that come with policies these days? Many cannot.

If you are in this predicament or know someone who is, this column lays out the main options available. A warning: All have drawbacks, but here’s a general rule: The best choice is usually the option that gives you the greatest coverage, for the lowest price, for the longest time.

COBRA: The Consolidated Omnibus Budget Act of 1985 gave employees who lose job-based coverage the right to remain on their employers’ policies for at least 18 months, and longer under some circumstances.

COBRA applies to workplaces with 20 or more employees, and those who lose their jobs have to pay the premium plus a small administrative fee. The average annual family premium for employer-provided coverage last year was $20,500, with the employee paying only $6,000 of that amount, so this isn’t likely to be a great option for someone who was just laid off, unless they can tap their savings.

Patient Protection and Affordable Care Act policies are a better option for many laid-off workers, but can be problematic for some. Those with low and middling incomes – below 250 percent of poverty, or a little more than $64,000 for a family of four – should consider an ACA policy. You’ll get government help paying the premium and, most importantly, the deductibles, coinsurance, and co-pays, which are increasingly pinching family budgets, making it hard for them to afford care.

Families with incomes between 250 percent and 400 percent of poverty (nearly $105,000 for the family of four) get less premium-payment help, declining as income rises. The biggest problem for families in this group is that there is no help for deductibles, co-insurance, and co-pays. That makes these policies less attractive, especially when someone gets sick and finds that a deductible of $8,000 means they won’t get any help until they have paid at least that amount out of pocket.

If you don’t qualify for cost-sharing subsidies, you’ll have to make a choice: Go with a cheaper premium but higher cost sharing, and be prepared to pay more if you get sick; or, pay more up front and have more protection when illness strikes.

Since the president has declined to open the ACA marketplaces, you’ll have to apply for a policy through a special provision that lets people enroll if they’ve lost employer coverage in the last 60 days or expect to lose it in the next 60 days. You can also qualify if you’ve lost coverage you had through a family member. Kentucky’s site for ACA plans is healthbenefitexchange.ky.gov.

Remember that having a preexisting health condition is not a barrier to obtaining an ACA policy. That is a huge help to anyone who is ill.

Medicaid is a good option for people with low incomes. Administered by states, it is largely free, and provides comprehensive coverage, but only to people in households with annual incomes under 138 percent of the federal poverty line (in most states, which like Kentucky expanded Medicaid under the ACA). The Families First Coronavirus Response Act that Congress passed March 18 bans states from disenrolling anyone who was covered by Medicaid as of that date, making it easier to maintain coverage.

Kentucky has made it easier to apply for Medicaid, reducing its 20-page application to one page and presuming eligibility. Apply by calling 1-855-459-6328 or online at Benefind.ky.gov.

(There has been confusion over whether to sign up for presumptive-eligibility Medicaid or the traditional programEmily Beauregard, says executive director of Kentucky Voices for Health, a nonprofit advocacy group. “Beauregard said people who have lost jobs should apply for presumptive eligibility first,” the Lexington Herald-Leader reports. “If someone still needs health insurance after the two months or June 30 deadline is up, then they should apply for traditional Medicaid. Eligibility for that program is based on household income. If people don’t qualify for traditional Medicaid and have lost their jobs, they should try to get insurance on the ACA exchange, Beauregard said.”)

Short-term policies are an alternative made available last year by the Trump administration. They offer coverage for up to three years and can cost half as much as more comprehensive policies. But they generally don’t cover preexisting conditions and often don’t cover maternity care, mental-health treatment or prescription drugs. I call them the “buyer-beware” option because some consumers have purchased them only to be left with large bills when they got sick. If you’re offered one of these, proceed with extreme caution.

Navigating this marketplace has never been easy. Send your health policy questions and concerns to Trudy at trudy.lieberman@gmail.com.