What to Do If You Lose Health Insurance Coverage

Losing health insurance coverage can feel overwhelming and stressful, especially if you rely on it for essential medical care. Whether you lose your insurance due to a job change, budget cuts, or another reason, it’s important to act quickly to find alternatives and minimize the potential gap in coverage.

What to Do If You Lose Health Insurance Coverage

1. Understand the Reason for Losing Coverage 

Before taking any steps, it’s important to understand why you lost your coverage. Some common reasons for losing health insurance include:

• Job loss: If your health insurance was tied to your job, losing your job often means losing health benefits.

• Divorce or separation: If you were covered under a spouse’s or partner’s plan, a divorce or separation can result in losing coverage.

• Aging out of a parent’s plan: If you were on a parent’s health plan and turned 26, you may no longer be eligible for coverage under their insurance.

• Changes in income: If you were previously eligible for government assistance like Medicaid or the Children’s Health Insurance Program (CHIP), a change in your income may affect your eligibility.

• End of a temporary program: If you were on a short-term or temporary health plan, such as a COBRA plan or a marketplace plan with an annual renewal, you might lose coverage when the policy ends.

2. Check If You Qualify for Special Enrollment

If you lost your job-based health insurance, you may qualify for a Special Enrollment Period (SEP) through the Health Insurance Marketplace. This means you can apply for a new plan outside the usual open enrollment period. SEP typically lasts for 60 days after losing your coverage. 

To qualify for SEP, you’ll need to:

• Lose your job-based insurance or any other health coverage.

• Have a qualifying life event, such as marriage, birth of a child, or moving to a new area.

Visit the Health Insurance Marketplace website (HealthCare.gov) to apply and compare different plans based on your needs and budget. 

3. Explore COBRA Coverage 

If you lose health insurance due to job loss, COBRA (Consolidated Omnibus Budget Reconciliation Act) may allow you to continue your current insurance for a limited time—usually 18 to 36 months. However, COBRA can be expensive, as you’ll be responsible for the entire premium, including the portion previously paid by your employer. 

If you’re eligible for COBRA coverage, consider whether it’s the right option for you. While it’s typically more expensive than other options, COBRA ensures you can continue your current healthcare provider and plan during the transition.

4. Look into Medicaid or CHIP

If you have a low income, you may qualify for Medicaid or the Children’s Health Insurance Program (CHIP). These government-sponsored programs offer free or low-cost coverage. Eligibility depends on your income, family size, and state of residence, as Medicaid programs vary by state. 

You can apply for Medicaid or CHIP at any time during the year, as they don’t have a designated open enrollment period.

Visit your state’s Medicaid or CHIP website to check eligibility and apply. 

5. Consider Short-Term Health Plans

If you’re in need of temporary coverage while you search for more permanent solutions, short-term health plans might be an option. These plans can offer basic medical coverage for a limited duration (usually 3 to 12 months).

However, keep in mind that short-term plans are not required to cover essential health benefits, and they may not protect you from high out-of-pocket costs. They often don’t cover pre-existing conditions or preventive care, so it’s important to carefully review the terms before signing up. 

6. Look for Coverage Through a Spouse’s or Partner’s Plan

If you’re married or in a domestic partnership, you may be able to join your spouse or partner’s health insurance plan. Typically, you must apply within 30 days of losing your own coverage in order to qualify for a Special Enrollment Period under their employer’s plan.

Check with your spouse’s or partner’s employer to see if they offer this option. 

7. Check for Health Insurance in the Marketplace

If you don’t qualify for COBRA, Medicaid, or a spouse’s health plan, the Health Insurance Marketplace is another option for finding coverage. The Marketplace allows individuals to buy insurance plans directly from providers. Depending on your income, you might also qualify for subsidies to help reduce premiums.

Open Enrollment for the Marketplace typically happens once a year, but losing health insurance coverage qualifies you for a Special Enrollment Period, as mentioned earlier. Visit HealthCare.gov or your state’s marketplace to apply. 

8. Budget for Healthcare Costs

If you’re unable to secure immediate coverage, you’ll need to budget for potential healthcare costs. Here are some ways to prepare:

• Set up an emergency fund: Save for urgent healthcare needs while you’re between insurance plans.

• Negotiate healthcare costs: Some healthcare providers offer payment plans or discounts if you explain that you’re between insurance plans. 

9. Seek Preventive Care 

Regardless of your insurance status, preventive care is essential for maintaining long-term health. Many clinics and health centers offer free or sliding-scale fees for basic preventive services like vaccines, screenings, and wellness exams. 

Additionally, community health centers may offer affordable care regardless of insurance status.

FAQs

Can I still use my insurance after losing my job?

If you lose your job-based health insurance, you typically have a grace period of up to 60 days to enroll in a new plan or apply for COBRA coverage. After this period, your insurance will likely be canceled.

How do I apply for COBRA insurance? 

Your employer should provide you with a COBRA notification and instructions on how to apply. This will include details about the coverage options and how to pay premiums. 

What are the income limits for Medicaid? 

Income eligibility for Medicaid varies by state. Generally, the program covers individuals and families with low incomes, but the limits differ based on your state’s specific guidelines. You can check eligibility and apply through your state’s Medicaid website. 

What if I miss the Special Enrollment Period? 

If you miss the Special Enrollment Period, you’ll need to wait until the next open enrollment period to apply for a plan through the Marketplace unless you qualify for another qualifying life event (e.g., marriage, birth of a child).

Are short-term health plans a good option?

Short-term plans can be useful for temporary coverage but may not cover all medical needs. They typically don’t include essential health benefits, preventive care, or coverage for pre-existing conditions. Carefully consider your health needs before choosing this option. 

Conclusion

Losing health insurance coverage can be a daunting experience, but there are several steps you can take to find a solution that meets your needs. Whether you apply for COBRA, look for a plan through the Marketplace, or qualify for government programs like Medicaid, there are options available to help ensure you stay covered during the transition. The most important thing is to act quickly, understand your options, and choose a plan that fits both your health and financial needs.