Understand Your Other Coverage Options
While COBRA is the standard health coverage option for people who have lost a job, it isn't the only option. Thinking creatively about coverage options could help find a better coverage alternative, or provide gap insurance for that period after COBRA has expired. Here are the more common coverage options to consider:
Spouse's Insurance.
If your spouse is employed and has insurance, there is a good chance that adding you to his or her insurance, or shifting your family from what was your plan to their plan, will be less expensive than COBRA. Unless you have free or low-cost COBRA provided to you as part of your termination package, there is a good chance your employer will require you to be 100-102% of the COBRA premium (although the Stimulus Plan's COBRA subsidy could help in some cases). Remember that your spouse's insurance may have a strict "life change event" window for adding you, commonly 30 days (but it varies by employer).
High-Deductible Health Plan (HDHP) and Health Savings Account (HSA).
For people whose COBRA coverage is very expensive, or who may want to use this opportunity to start their own business or freelance, finding the right HDHP and HSA combination may be the right long-term move. While COBRA is typically viewed as a short-term measure, finding the right HDHP and HSA combination could help you save for future health expenses and begin counting your medical costs toward the new deductible. Find more information on HDHPs and HSAs in our special HSA section.
Other Plans You are Uniquely Qualified For
. Are you a Veteran? You may be eligible for health coverage within the VA Health system, although you will need to file a claim to understand what level of coverage you qualify for. Do you attend a college or university? Many schools offer health coverage either as part of or as an option with tuition. Perhaps it can cover your children who are attending college. Other longshot places to look for coverage can be with fraternal organizations you belong to, unions, church organizations, or Native American tribes you may belong to.
Community-Based Coverage Gap Plans.
Some communities have privately-funded or public/private partnerships will allow "gap" coverage - coverage for people who don't qualify for government assistance due to high income, but who also don't currently have coverage. These plans are usually localized or regional, so the best information would come from talking to a county social worker or a financial staff member at a local hospital.
Medicaid or SCHIP.
As a last resort, if you happen to be unemployed long enough so your annual income decreases significantly, you may qualify for Medicaid, or the childrens SCHIP program. Medicaid is a state-administered program, so requirements and income levels to qualify vary by state. Keep in mind that Medicaid may require a "spend-down", a demonstration that you have spent your remaining assets and have little remaining. Keep in mind that children may qualify for SCHIP even though the parents may not qualify for Medicaid. Given the state and county variations in Medicaid and SCHIP programs, contact a county social service office or the financial counselor at your local hospital to learn more.