What Health Insurance to choose when unemployed?

Unemployed benefits, sometimes called unemployment insurance or compensation are social welfare payments by the state or other bodies to unemployed people. These sums may be small and cover only basic needs or they may compensate the lost time proportionally to the previous earned salary.

Benefits for the unemployed are generally given only to unemployed and often there are conditions you need to meet, like that you are seeking work and don’t currently have a job.

In some countries, a significant proportion of unemployment benefits are distributed by trade/labour unions, an arrangement known as the Ghent system.

In case you find yourself out of work, there are two main options regarding health insurance. You and your family can either apply for individual insurance through a health care provider or you can choose to accept COBRA, a continuance of your employer’s coverage for you and your dependents.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives you the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events.

Also, you might find the individual insurance plan more suitable for you and your family, you just need to decide what deductible you’re going to choose, and then you need to decide if you want to have a co-pay on your plan and what other benefits you’d like included. The monthly premium will be lower, the higher the deductible is. COBRA can be more costly, but you do not have to change anything, the plan stays the same.

In case you choose federal COBRA, it can be valid up to 18 months and a further 18 months of coverage depending from your state. It is costly because you have to pay the same premium as your employer paid for you and an administrative fee over that (2 – 3%). In case your dependents need to stay on COBRA because other insurance companies will not accept a serious pre-existing condition they might have, your dependents can remain on COBRA while the rest of the family, including you, chooses a different insurance company.

In case you are of age 26, you can still remain on health insurance of your parents.

In case you have a pre-existing condition that might or will cause a decline in health, there are solutions available through federally funded pre-existing condition plans.

Medicare and Medicaid
Government-sponsored health insurance plans – Medicare and Medicaid can help you when you are unemployed, you just need to meet the qualifications.

Medicare – you have to be 65 or in case you are under 65, you must have been on Social Security disability for at least 24 months. You can apply online.

Medicaid – requirements vary from state to state, but it is generally based upon income, or it can be coordinated with Social Security disability and Medicare for those who are both under 65 and disabled.