Health insurance after a layoff: choosing the plan that’s right for you

by Jessica Zimmer

After a layoff, you have several options for healthcare coverage. Here is a quick guide as to how to choose the one that is right for you. Begin the brainstorming process by asking three critical questions. Do you want to

keep the same health insurance policy that you had at the job you left? Do you have major expenses caused by pre-existing conditions? What do you estimate your annual income will be six months and 12 months after the layoff?

If you answered yes to the first and second questions and will be relatively financially secure in the next six months, COBRA may be the best option for you. COBRA permits you to keep your current insurance for up to 18 months after you leave your job. The disadvantage of COBRA is that you have to pay 100% of your premiums. For many, this can mean a bill double that which the covered individual paid while employed. COBRA prevents insured parties from being dropped, targeted for a rate increase, or facing exclusions for pre-existing conditions.

If you answered no to the first question, yes to the second question, and will be relatively financially secure in the next six months,

think of buying a new long-term policy. You may

be able to purchase an affordable health insurance policy as a member of a group if you are a licensed professional. Look for a policy with language that does not exclude coverage of pre-existing conditions.

If you answered no to the first and second questions and will not be financially secure in the next six months, a short-term medical insurance policy may be the best option. These policies typically last up to six months and cost approximately $100 for a single individual. The downside is these policies can have extremely high deductibles and co-pays. In addition, pre-existing conditions may be excluded from coverage. Short-term medical insurance policies can be offered to members of group plans.

If you answered no to the first and second questions and expect your annual income to be at or below poverty level in the next 12 months, consider signing up for a city or county healthcare plan. Such plans usually require that you be a resident of a locality and receive care from local providers. In order to qualify for these plans, you must work a certain number of hours per month, have an annual income below a set amount, and not be eligible to receive healthcare coverage from your current employer.

Persons who answered no to the first and

second questions and expect their income to be extremely low within the next 12 months may be eligible to apply for Medicaid. The downside of Medicaid is that states have made severe budget cuts in recent years. This has left insured parties without many choices regarding providers.

Before making a decision, think of visiting a financial counselor or insurance consultant. You can also search for information tailored to your needs at HealthCare.gov, an informational website created by the federal government.

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