Temporary Medical Insurance Solutions for the Unemployed
Record unemployment in the past two years means many have found themselves out of work and in need of temporary medical insurance. Financially strapped individuals and families may be tempted to go without; however, a single accident or unexpected illness can result in further financial strain.
You have options and you may be surprised at how affordable unemployed medical insurance can be. No solution is perfect for everyone. It is important to consider your budget and health care needs when making a decision. Consult your health insurance broker with any questions or concerns before you buy.
COBRA
Laid off workers eligible for COBRA continuation coverage are allowed by law to keep their group coverage for a limited time, but with no federal subsidy, the cost of the monthly premium on a COBRA policy is one of the most costly health insurance options.
According to the 2009 Kaiser/HRET Employer Benefits Survey, the full annual cost of employer-sponsored health insurance for an individual averaged $4,824. At 102 percent for COBRA, monthly premiums nearly reach $410. The full annual family cost averaged $13,375, which equates to a monthly COBRA payment of approximately $1,137.
Regardless of price, one of COBRA’s benefits is that it allows individuals and families to maintain comprehensive coverage. It also provides a way for those with pre-existing conditions to remain insured—they may have trouble qualifying for other types of coverage and, if they do qualify, face higher premium rates and exclusions.
Those who are in relatively good health and need fewer than six months of coverage may want to consider short-term medical insurance. While they may exclude pre-existing conditions, most STM plans do qualify as creditable coverage and can help protect you from being subject to pre-existing condition restrictions when you obtain a new major medical health insurance plan.
Individuals and families looking for a safety net in the event of a catastrophic illness or injury can quickly and easily apply for STM online. Approval comes within minutes, and coverage may begin as early as the next day. To determine eligibility, applicants answer a small number of health-related questions; those with serious health conditions are unlikely to qualify. STM premiums are usually a fraction of COBRA’s, but out-of-pocket expenses will be higher.
STM plans may last as few as 30 days or as many as 12 months. Once a plan expires, it is possible to apply for another policy; however, that policy is considered completely new and will not cover illnesses developed under the first one.
Limited benefit medical
Limited benefit medical plans offer inexpensive, creditable, non-catastrophic coverage. Stated benefit amounts are paid for physician office visits, preventative care, diagnostic work, emergency room visits and more.
Because they are guaranteed issue, and therefore do not involve underwriting, these plans are generally attractive for those considered “uninsurable” due to pre-existing conditions, those who cannot afford major medical insurance but need basic non-catastrophic coverage or those who have exhausted COBRA and have no other options. Limited benefit medical is not suited for those who can afford and qualify for major medical insurance through COBRA or an individual plan.
Additional reading:
Health Insurance Options for Unemployed Beyond COBRA
|