Q. I was laid off right before open enrollment ended, and now do not have any income/insurance. What are my health insurance coverage options?
A: As discussed in more detail below, you’re likely eligible for Medicaid during the time that you’re without an income. But losing your employer-sponsored insurance because you were laid off counts as a qualifying event, which gives you a special enrollment period that continues for 60 days from the date your old policy ended (even if you have the option to elect COBRA). If you want to purchase a new ACA-compliant private insurance plan, you’ll need to complete your enrollment within that time frame.
Depending on what your annual income ends up being for the whole year (admittedly tricky to project at this point) you may qualify for premium subsidies in the exchange. These subsidies actually extend well into the middle class; a family of four can get premium subsidies in 2021 with an income as high as $104,800; here’s how income is calculated under the ACA.
Since I was laid off, is Medicaid an option for me?
Medicaid may be an option for you, depending on where you live. If you’re in a state that has expanded Medicaid, coverage is available if your income is up to 138 percent of poverty level. (Above that level, premium subsidies are available up to 400 percent of the poverty level.) If your state has not expanded Medicaid, eligibility is significantly more restricted. (Here are Medicaid eligibility guidelines for each state.) Contact your state Medicaid office or the exchange to see if you could qualify for Medicaid until you get another job.
Assuming you’re in a state that has expanded Medicaid, you’ll qualify for Medicaid during the time that you have no income. You can then switch to a private plan in the exchange (with subsidies if you’re eligible) or to an employer-sponsored plan if you get a job later in the year and your total annual income is going to end up being more than 138 percent of the poverty level. You’ll have the opportunity to make that coverage change if and when your income picks up again.
If you’re in the coverage gap because you’re in a state that hasn’t expanded Medicaid, you’ll have an opportunity to enroll in a subsidized health insurance plan through the exchange later in the year if you find a job that puts your income at or above the poverty level (assuming the job doesn’t come with health insurance and you need to purchase your own coverage). This was a rule change that took effect in 2015.
Normally, a change in income does not count as a qualifying event. But for people who are in states that haven’t expanded Medicaid and are ineligible for Medicaid or premium subsidies because their income is below the poverty level, HHS made an exception to the rule. As of 2015, people in that situation are allowed to enroll in a subsidized exchange plan as soon as their income reaches 100 percent of the poverty level, regardless of when that happens during the year.
Is short-term health insurance a good option if you've been laid off?
If you’re unable to afford an ACA-qualified plan while you’re between jobs, and you’re not in a state where Medicaid is available, you might want to consider a short-term health insurance plan. These temporary health insurance plans are not regulated by the ACA, so they still use medical underwriting, don’t cover pre-existing conditions, impose caps on benefits, don’t have to cover preventive care, etc. But they’re better than nothing and they’re far less expensive than an ACA-qualified plan for people who aren’t subsidy-eligible (ie, anyone with income below the poverty level in a state that hasn’t expanded Medicaid).
If you get coverage on your own – either Medicaid or a private plan – and then get a new job that provides health insurance benefits, you’ll be able to cancel the interim insurance and switch to your employer’s plan once you’re eligible for coverage. Coverage in the individual market is issued on a month-to-month basis; there are no annual contracts, so you can cancel at any time, although the only available termination date is typically the last day of the month.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.