Unemployed Due to Covid-19? Here’s How That Affects Medical Benefits
- UpdatedOct 17, 2024
- COVID created a wave of unemployment across the US.
- Job loss usually cause people to lose health insurance as well.
- Protect yourself with COBRA, Medicaid or subsidized plans from the Affordable Care Act marketplace.
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The coronavirus pandemic has led 6.6 million people to file for unemployment. If you’re one of these people, you may be wondering what will happen to your health insurance coverage. The bad news is that your employer-sponsored health benefits probably won’t come with you when you lose your job. The good news is that you have a number of options to get the health insurance you need. Here’s what you can do if you’ve lost your job and medical coverage due to the pandemic.
Get on a family member’s plan
If your spouse is still working and has an employer-sponsored health insurance plan, find out if you can add yourself to their plan. Keep in mind that if you go this route, you have 30 days from the time your former employer stops paying for your coverage to enroll in your family member’s plan. In the event you’re under 26, the Affordable Care Act will allow you to receive coverage under your parents’ health insurance.
Look into Medicaid
Medicaid is a great option that offers low-cost, comprehensive healthcare benefits. If you think you don’t qualify for Medicaid, do some research — you may now be eligible. Fortunately, 36 states and the District of Columbia have expanded Medicaid coverage. If you live in one of these states or D.C., and earn up to 138% of the federal poverty level, you may sign up for it. The federal poverty level is:
$17,609 for individuals
$23,792 for a family of two
$36,156 for a family of four
Use the Affordable Care Act marketplace
The Affordable Care Act Marketplace is a federal website you can use to browse a variety of affordable health insurance plans, compare them, and make a purchase. It may be an option if you’re not eligible for a family member’s plan or Medicaid.
If your expected income for 2020 falls between 100% and 400% of the federal poverty level, you may be able to lock in the Premium Tax Credit. Essentially, the Premium Tax Credit is a subsidy that can help make your health insurance premiums through the marketplace more affordable. You may qualify if your income falls within these ranges.
$12,490 to $49,960 for individuals
$16,910 to $67,640 for a family of two
$25,750 to $103,000 for a family of four
It’s important to note that most states depend on the Affordable Care Act Marketplace to help their residents find coverage. However, if you live in the District of Columbia or one of 12 states that has their own marketplace, you’ll need to use that option instead. Here are the websites for these marketplaces.
|—|—| | California | Covered California | | Colorado | Connect for Health Colorado | | Connecticut | Access Health CT | | District of Columbia | DC Health Link | | Idaho | Your Health Idaho | | Maryland | Maryland Health Connection | | Massachusetts | Massachusetts Health Connector | | Minnesota | MNsure | | Nevada | Nevada Health Link | | New York | New York State of Health | | Rhode Island | HealthSourceRI | | Vermont | Vermont Health Connect | | Washington | Washington Healhplanfinder |
Consider COBRA
Through the Consolidated Omnibus Budget Reconciliation Act (COBRA), you may be able to keep your health insurance benefits when you lose your job. While COBRA may be a fine choice, it’s essential to understand a few things before you commit to it.
Coverage doesn’t last forever: In most cases, you can stay on COBRA for up to 18 months, as long as you make your monthly premium payments. So once the COBRA period is up, you’ll have to find an alternative way to receive coverage.
COBRA is expensive: When you receive health insurance benefits through your employer, all you have to pay for is part of a premium that’s usually deducted from your paycheck. With COBRA, however, you’re responsible for the entire premium. In addition, you’ll have to pay a 2% administrative fee.
Don’t leave yourself uninsured
While it may be tempting to go without health insurance for a while in order to save some cash, doing so is a risky move. Even if you consider yourself a healthy individual, you’re still at risk for the coronavirus or another condition that may require costly medications and doctor visits. By securing health insurance shortly after you lose your job, you can save yourself from thousands of dollars in possible medical debt and achieve some much needed peace of mind.
Keep your finances healthy too
Learning how to deal with debt, money, and unexpected financial road blocks such as lost health insurance coverage doesn’t need to be hard. Here at Freedom Debt Relief, we’ve created a simple to follow guide to help you find the tools you need to manage your debt and create a better financial future. Get started by downloading our free guide right now.
Learn More
Coronavirus Stimulus Package: What it Means For You (Freedom Debt Relief)
3 Smart Ways to Spend Your Stimulus Check (Freedom Debt Relief)
Need to Skip a Loan Payment Because of COVID-19? Talk to Your Lender Now (Freedom Debt Relief)
Medicaid Program (Benefits.Gov)
COBRA Coverage and the Marketplace (HealthCare.Gov)
Debt relief by the numbers
We looked at a sample of data from Freedom Debt Relief of people seeking debt relief during September 2024. This data reveals the diversity of individuals seeking help and provides insights into some of their key characteristics.
Credit utilization and debt relief
How are people using their credit before seeking help? Credit utilization measures how much of a credit line is being used. For example, if you have a credit line of $10,000 and your balance is $3,000, that is a credit utilization of 30%. High credit utilization often signals financial stress. We have looked at people who are seeking debt relief and their credit utilization. (Low credit utilization is 30% or less, medium is between 31% and 50%, high is between 51% and 75%, very high is between 76% to 100%, and over-utilized over 100%). In September 2024, people seeking debt relief had an average of 83% credit utilization.
Here are some interesting numbers:
| Credit utilization bucket | Percent of debt relief seekers |
|---|---|
| Over utilized | 30% |
| Very high | 32% |
| High | 19% |
| Medium | 10% |
| Low | 9% |
The statistics refer to people who had a credit card balance greater than $0.
You don't have to have high credit utilization to look for a debt relief solution. There are a number of solutions for people, whether they have maxed out their credit cards or still have a significant part available.
Personal loan balances – average debt by selected states
Personal loans are one type of installment loans. Generally you borrow at a fixed rate with a fixed monthly payment.
In September 2024, 44% of the debt relief seekers had a personal loan. The average personal loan was District of Columbia, and the average monthly payment was $362.
Here's a quick look at the top five states by average personal loan balance.
| State | % with personal loan | Avg personal loan balance | Average personal loan original amount | Avg personal loan monthly payment |
|---|---|---|---|---|
| Massachusetts | 42% | $14,653 | $21,431 | $474 |
| Connecticut | 44% | $13,546 | $21,163 | $475 |
| New York | 37% | $13,499 | $20,464 | $447 |
| New Hampshire | 49% | $13,206 | $18,625 | $410 |
| Minnesota | 44% | $12,944 | $18,836 | $470 |
Personal loans are an important financial tool. You can use them for debt consolidation. You can also use them to make large purchases, do home improvements, or for other purposes.
Support for a Brighter Future
No matter your age, FICO score, or debt level, seeking debt relief can provide the support you need. Take control of your financial future by taking the first step today.
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