Health Insurance when you are laid off

Pals, I was reading letters at a website I look at often. A woman wrote that her 62-year old husband had been unexpectedly laid-off from his job. She said she didn't know where to begin to think about health insurance (and a lot more).  I talked to Len.  Man, we have been here.

This is what Len wrote. This answer is too long to post on someone else's website so we are sharing it here. 

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Says Len:

You are in a difficult situation.  You can buy a medical insurance policy through an agent, outside of any state exchange and outside of the ACA (Obamacare).  It might cover you, your spouse and any children.  There are many different kinds of policies, which an agent will explain.  You will probably find that the policy costs a great deal more than you would have thought and the coverage will not cover many of the things you feel are important.

You have two more options:  buying healthcare through the ACA (Obamacare) or continuing your existing plan through COBRA.  

If you buy insurance through the ACA, it will have certain minimum health care needs covered.  There are differences between plans, but they are summarized and described on the ACA website.  They also rate plans as "Gold/Silver/Bronze" to help you.  It is confusing, and kind of mind-numbing, but you should be able to see what is available and make a decision.  When you compare policies, you will also see the cost, which is quite expensive.  The important point about the ACA plans is that the price shown is the "list price."  After you make a selection, a second part of the ACA shows you how much the government will help pay; that reduces the amount that you actually pay for health insurance.  

This is worth repeating.  The process is, first, you tell the website how much you think you will earn in the course of the year.  They take that amount and decide how much they can give you to help you pay for the insurance.  That means that the Gold plan is still more than the Bronze plan, but the total amount you pay is much more affordable if you have a limited income.

Two fast notes:  The amount of support you get depends on income; rich people don't get as much as poor people.  You tell the ACA how much you think you will earn; at the end of the year, when you do your taxes, you tell them how much you actually earned.  If you earned more than the estimate, you will need to pay back the ACA.   Also, people talk about "Open enrollment period."  That is for people who had no insurance before.  If you lose your job and health benefits, it becomes a 'Qualifying Event,' and you can get coverage through the ACA at that time.  So, the open enrollment issue doesn't apply to you. 

ACA isn't the only way to go.  It sounds as if your husband was earning a substantial salary at his previous job.  It may be that he will get work elsewhere soon, with or without health care.  If that's the case, then you won't get much support to help you pay down the premium.  If he does not get another job, the support might be considerable.  You need to make this estimation when you decide what you want to do.

If your husband had good health insurance at his previous job, you might want to consider COBRA.  That lets you keep the same health coverage you had when you were working; except that you pay the whole thing.  You will discover that your previous employer paid quite a bit of the premium, and COBRA is expensive.  One bright light is that, in a group plan, everyone gets the same rate as one another; old people don't pay more than young people.  In our case, I worked at a job that had many young employees, which meant that the premiums for all employees was sort of low.  When I was laid off I was 63, and I found that the COBRA coverage was actually cheaper than coverage through the ACA.  

You can't get government support to help you pay down the premiums through COBRA coverage; on the other hand, that means you don't have to make any estimates about your income and if you get a part-time job or free-lance, you won't pay any more.  The downside of COBRA is that you can only maintain it for 18 months; at that time, you will need to find another solution (including coverage through the ACA).