What about health insurance?

As the reality of being laid off set in, I realized that this meant not only no source of income, but no health insurance or retirement benefits. Having had a period with no health insurance coverage for several brief stints before college, I was not ready to go through this again. However, without comprehensive health care coverage coming up immediately, I was not sure how to finance health insurance coverage for myself with only unemployment insurance payments coming in.

For many Americans who are not fortunate enough to be receiving unemployment insurance, health insurance coverage does not make the cut in the list of top payment priorities as food, housing, and transport are often atop the list.

COBRA:
You may be able to seek coverage through your prior employer under COBRA, although you are responsible for paying your entire premium. Typically, because you are part of a group through your employer, this will usually be a larger amount than if you seek out an individual health insurance coverage plan. However, if you have pre-existing conditions or are required to maintain your existing coverage for other reasons, it may be worth paying the additional monthly premium. Note that some smaller employers are COBRA exempt and may not be required to offer you coverage under COBRA. In some instances, smaller employers may still be able to offer coverage by agreement with your health insurance provider; however, it depends upon the provider and the employer. It's best to have this conversation with your employer immediately, if possible. Some smaller employers do not understand the nuances of this area of law, so it may be up to you to learn the pros and cons and educate your former employer about them, though ideally you will not need to do this (though it never hurts to be educated about your rights and opportunities!).

Need-based health insurance:
Many states, such as Washington and Massachusetts, offer basic health insurance coverage for those who meet income and eligibility requirements. Often, and especially recently, there are waiting periods for coverage under these plans. Apply immediately after losing your job to get in line.

Additionally, some hospitals and medical centers offer financial assistance to those recently unemployed and/or below a certain income level. Inquire as soon as possible with your local hospital or medical center. Applications typically take several weeks to process and likely require a disclosure of your financial situation, including assets and liabilities, as well as proof of unemployment. Typically, this can lead to full payment of your medical expenses for a set period of time (usually three to six months, although it varies by institution).

Individual health insurance coverage:
Many online companies, such as eHealthInsurance (www.ehealthinsurance.com) offer great comparison packages between plans with varying coverage levels and deductibles. Ideally, you should apply and obtain a policy for which you have the entire deductible saved so that you can pay it in the event of a medical emergency. Apply immediately for coverage to avoid any gaps in coverage.


Catastrophic health insurance: worth the risk?
Catastrophic health insurance can be a good back-up, but this offers only minimal insurance for extreme cases of hospitalization, etc. and means that most of your healthcare expenses are out-of-pocket. It's a bit of a gamble because if you or a family member encounters a medical emergency demanding immediate attention, this can often be more expensive than if you paid a higher monthly insurance premium.

Watch out for pre-existing condition clauses:
Freeze-out periods for pre-existing conditions can be quite frustrating, often resulting in nine-month or more waiting periods for those who are not eligible for a waiver of these waiting periods. If you have continuous prior coverage, this may be waived. But, be proactive about requesting that your new provider waive the pre-existing condition clause.

Action plan:
1. Discuss COBRA eligibility and cost of coverage with former employer;
2. Determine health insurance needs, deductible you can pay, and possible monthly premium;
3. Apply for low-cost state health insurance;
4. Apply for individual health insurance plan, checking to be certain that you are not subject to a pre-existing condition clause and getting credit for prior coverage;
5. Follow up with insurance agent and insurance provider to be certain that application is received and approved in time for continuous coverage to occur.