- Since March, 25 million people and counting have lost their insurance due to the COVID-19 pandemic.
- Those who have lost insurance now have three options: enroll in Medicaid, individually-purchased insurance, or COBRA.
- Here is the breakdown of the enrollment qualifications and coverage information for each option, and also discusses some financial relief programs available.
Layoffs caused by COVID-19 continue to rise, triggering a wave of individuals losing their employer-sponsored health insurance. A report from the Urban Institute estimates that over 25 million people have lost their health insurance since March.
So what options do newly uninsured individuals have?
Those who lost coverage will generally be left with three insurance options: Medicaid, individually-purchased insurance, or continuing their old plan through COBRA. The following diagram shows the potential change occurring in the insurance landscape due to these layoffs.
According to the Urban Institute, almost half of these uninsured individuals will be eligible for Medicaid. About 8 million could buy insurance through health care exchanges. A small portion of these individuals could continue their health coverage through COBRA. And the remaining portion of individuals will simply become uninsured.
The following is an overview of each health insurance option for newly uninsured individuals, and what the costs and coverage could look like.
Option 1: Medicaid
Medicaid is a government insurance program that provides health coverage to low-income families and individuals. While the federal government sets certain guidelines, states have the flexibility to administer the program. Therefore, the Medicaid program can vary widely by state.
How do I qualify?
Qualifying for Medicaid largely depends on your state of residence. In general, there are mandatory eligibility groups that Medicaid must cover, including low-income children and pregnant women. In addition, as a result of the Affordable Care Act (ACA), 37 states currently have what is known as expanded coverage, meaning that you can qualify for Medicaid on your income alone. Otherwise, you can qualify for Medicaid based on your income, household size, disability, family status, and other factors. If you recently lost your job, Medicaid considers your current monthly income to qualify.
There are two ways to enroll in Medicaid:
- Through Healthcare.gov: If you fill out an application for health insurance through the ACA on Healthcare.gov and determine that you or someone else in your household qualifies for Medicaid, Healthcare.gov will automatically send your information to your state Medicaid agency. Submitting an application on Healthcare.gov is an easy way to find out if you qualify for Medicaid or qualify for an individually-purchased insurance plan with savings based on your income.
- Directly through your state Medicaid agency: You can also apply directly through your state Medicaid agency.
Coverage and costs
Federal guidelines require Medicaid to have certain minimum health coverage including:
- Hospital and doctor office visits
- Screenings and diagnostics
- Treatment for children
States can optionally provide coverage for:
- Prescription drugs (currently, all states do)
- Personal care services
States can charge premiums (monthly payments to be enrolled in Medicaid), deductibles, and copayments or coinsurance. However, there is regulation on how much can be charged. Additionally, the federal government requires that there be no out-of-pocket costs for:
- Emergency services
- Family planning
- Pregnancy-related services
- Preventative services for children for people using the Medicaid program
- Certain vulnerable groups
To find out more about state-specific coverage and costs, be sure to visit your state’s Medicaid page.
Option 2: Individually-purchased insurance – I offer these plans. Feel free to call me at: 704-891-2274 Elaine Saccente
Another option is to individually-purchase coverage through the health insurance exchange, where you can directly buy family and individual plans. These exchanges were established by the ACA to provide more options outside of government or employer-sponsored insurance.
How do I qualify?
There are two scenarios in which you can sign up for individually-purchased insurance. Either you experience a qualifying life event, or you sign up during the open enrollment period. The open enrollment period typically runs from November to December of each year, depending on your state. During this time, anyone can sign up for health insurance.
A qualifying life event would include anything that causes you to lose or change your insurance status, such as losing your employer-based coverage, aging out of your parent’s insurance plan, or getting married. See a full list of qualifying life events here. You typically have 60 days to sign up after a qualifying life event before the special enrollment period closes.
Coverage and costs
Because of federal regulations established by the ACA, all plans offered through an exchange must offer a minimum set of essential health benefits. While plans offer the same benefits, the cost and amount the plan pays towards medical costs will differ. There are five plan tiers offered through the marketplace:
- Catastrophic: These plans have lowest premiums and very high deductibles. They are only available to people under 30, and are seen as an affordable option to protect yourself from worse case scenarios.
- Bronze: These plans have the lowest monthly premium out of the “metal” categories, but only pay an average of 60% an individual’s covered medical cost. These plans typically have the highest deductibles.
- Silver: Silver plans pay an average of 70% of an individual’s covered medical costs and usually have lower deductibles than bronze plans.
- Gold: Gold plans pay an average of 80% of an individual’s covered medical costs. They have a higher monthly premium but usually have a low deductible.
- Platinum: Premium plans have the highest monthly premium, and pay an average of 90% of an individual’s covered medical costs. Many of these plans don’t have a deductible.
Through the health insurance exchange, there are subsidies you can apply for that provide financial assistance depending on your income. This handy tool from Kaiser Family Foundation calculates an estimate of premiums and subsidies based on your income, age, and family size.
Option 3: Employer-sponsored insurance and COBRA
Many people who lose their employer-sponsored health insurance also have the option to continue their coverage with the same health plan through the Consolidated Omnibus Budget Reconciliation Act, commonly referred to as COBRA. COBRA allows people to pay a higher premium to keep their original plan.
How do I qualify?
If the company that normally sponsors your health insurance offers COBRA, you and your family can enroll within 60 days of a qualifying life event. Qualifying life events for COBRA include job loss, reduction in work hours, and death of the covered employee.
Not all companies offer COBRA to their employees. Companies with less than 20 employees and companies that have gone out of business are not required to offer COBRA. Federal government employers and churches are also exempt from COBRA.
Coverage and costs
The main disadvantage of COBRA is the cost. The premium payment through COBRA includes what you used to pay, plus what the employer used to pay, plus a 2% fee. The average individual covered by an employer-sponsored plan only pays about 18% of the total insurance premium — that means that enrolling in COBRA would require a 467% increase in premium payments.
With COBRA, your coverage stays exactly the same, since you are staying on the same plan. The main advantage of COBRA is that any payments you’ve already made towards a deductible or out-of-pocket maximum do not reset. That means that if you have already met or paid a considerable amount towards your deductible or out-of-pocket maximum (and you expect more healthcare expenses in the near future), it may be more affordable to continue coverage through COBRA than to purchase an individual plan through a health insurance exchange.
Option 4: No insurance
Finally, there are still some people who may be left with no insurance after losing their job. This may include those who don’t qualify for Medicaid, can’t afford to buy an individual plan, can’t afford COBRA, or are still deciding what to do.
Coverage and costs
When you don’t have insurance, all of your healthcare expenses are paid completely out-of-pocket. For some people who don’t have many ongoing healthcare expenses, it may seem cheaper to pay entirely out-of-pocket rather than pay for insurance premiums and copays. However, staying uninsured leaves patients vulnerable to extremely high medical bills in the event they do need healthcare.
Financial relief initiatives
As the number of uninsured individuals continues to grow, many initiatives have been created to ease out-of-pocket costs for patients, expand insurance enrollment periods, and improve access to COVID-19 testing.
Financial relief programs
Many healthcare companies are pitching in to help alleviate financial burden during the pandemic. For example:
- Novo Nordisk: Drug manufacturer Novo Nordisk is offering free 90-day insulin supply for eligible patients who have lost health insurance due to a change in job status.
- Eli Lilly: Through the Lilly Insulin Value Program, uninsured patients can fill their monthly prescription of Eli Lilly insulin for $35.
- Express Scripts: Pharmacy benefit manager Express Scripts is offering deep discounts on prescription drugs through its “Parachute Rx” program, capping costs at $25 for a 30-day supply of generics, and $75 for a 30-day supply of select brand-name medications.
- Oscar and Uno Health: Insurance company Oscar is partnering with Uno Health to provide financial support and resources for Medicare Advantage members.
- UnitedHealth Group: Insurance company UnitedHealth Group is providing customers with premium credits ranging from 5% to 20% for fully-insured individual and group plan sponsors. UnitedHealth Group is also waiving cost-sharing through September for Medicare Advantage plans.
- Aetna: In addition to waiving all cost-sharing for COVID-19 diagnostic testing, health insurance company Aetna announced that they will also waive cost-sharing for inpatient admissions at all in-network and out-of-network facilities for treatment of COVID-19 or health complications associated with COVID-19.
- Blue Cross Blue Shield: Insurance company Blue Cross Blue Shield committed $3 billion to support members, healthcare workers, and local communities. This includes expansions in telehealth and waived cost-sharing for COVID-19 testing and treatment.
- Cigna: Insurance company Cigna waived cost-sharing for all COVID-19 related care and launched a new “Customer Protection Program” to protect customers from unexpected costs such as “surprise” or “balance” bills from out-of-network healthcare providers.
Special enrollment periods
Twelve states reopened the enrollment period for their health insurance exchange during March and April due to COVID-19. This allowed people to sign up for individually-purchased insurance even if they didn’t experience a qualifying event. Covered California (the California state health exchange) extended its open enrollment period the longest, to June 30th.
Emergency stimulus relief
In response to the financial hardships many Americans are experiencing due to the pandemic, the federal government has passed several emergency stimulus packages. These measures include mandated free healthcare visits to get tested for COVID-19, paid sick leave and family leave for people affected by COVID-19, and direct economic relief through expanded unemployment insurance and recovery rebates. You can read about how these measures may affect your healthcare in more detail here.