This is a very important section since medical bills are the number one cause of personal bankruptcy. It's tough enough to come up with the deductibles, co-pays, out-of-network costs, etc. when we're working. But to come up with the entire medical costs when we're not working can rapidly become overwhelming. In some ways it's even more important to have health insurance when you are out of work than when you are working. But, how will you afford it when you are not working? Good question, and there are no easy answers.
COBRA (the Consolidated Omnibus Budget Reconciliation Act) is the most common alternative. It's not cheap, but neither are the other choices out there. If you qualify for COBRA coverage, you will be able to keep your coverage (for up to 18 months) just as if you were still working - same insurance company, same benefits, etc. But, you will be responsible for paying the entire premium. Your former employer will no longer pay any part of the premium as they may have done while you were working there. As a matter of fact, there will even be an additional 2% administration fee added on to your premium. Get ready for the sticker shock!
The good news is that if you were laid off during the period from September 1, 2008 through December 31, 2009, there will be help available to soften the blow. Thanks to the American Recovery and Reinvestment Act of 2009 (ARRA), you will only have to pay 35% of the total premium. Your former employer will pay the other 65%, and the U.S. Government will reimburse them through tax credits. So, if your entire bill would have previously been $900 per month, then your share will be $315 now. Still a lot when you're unemployed, but much better than having to come up with the whole $900! This benefit can be retroactive back to September 1, 2008, so check into that. This subsidy ends after nine months - then you will have to pay the entire premium. By then, hopefully, you will be working and eligible for insurance through your new employer. There are some restrictions and caveats that you need to be aware of. You cannot get it if you can get insurance through your spouse's place of employment. You will lose it if you go back to work and are eligible for insurance there. On and on, but most laid off workers will qualify. You can get details and options at the Department of Labor site and through searches on any search engine. Please go the the DoL link above to read the information. We have only covered the main points.
If (and only if) you determine that COBRA is out of the question even with the subsidy (or after the subsidy ends), then you must seek other alternatives - especially if, for some reason, you don't qualify for COBRA. If you have children, you must find an alternative for them. This is one part of your parental obligations. There are State specific programs for kids that you may now qualify for. One place to start is insurekidsnow.gov. Enter the state you reside in, and get busy doing whatever it takes to get your children into the program(s) offered.
Once your kids are covered, you can start searching for alternate coverage for yourself (and your spouse if applicable). Some health providers have short-term policies. Some offer catastrophic coverage with high deductibles but they will cover only major, high-cost health issues. You will have to investigate these types of coverages yourself, since availability may depend on where you live and what your situation is. Here are two examples to show the kinds of plans to search for. NOTICE! We in no way endorse either of these providers or their plans. They are shown for reference only. If you look into either of these (or similar programs), you will need to do the homework yourself to see if they qualify to provide what you need. A PDF reader (such as the Adobe Acrobat reader) is required in order to view these two types of plans at the links below.
Clinic specific plans - limited coverage:
UrgentMed
Short-term, more flexible plans - but higher costs:
HealthPartners
These plans are provided only so you will get an idea of the kinds of generic requirements for these types of plans. After reading through both, you will be better able to do your own Web searches in order to find a plan in your area that fits your particular needs.
We can't stress strongly enough how important it is for you and your family to have health insurance. Things happen - accidents, illnesses, etc. Any one of which could ruin you financially. Don't gamble - most gamblers lose eventually. Later on in our list, we will focus on health issues. There is one thing that you and your family can do to reduce your health care costs - do everything that you can to keep yourself and your family healthy. We all know most of the things that we need to do to accomplish that - eat right, exercise, etc. We will work on that after you finish the items in our top ten list.
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