Figuring Out Health Insurance When Changing Careers: Here's What You Need to Know

Let's examine each type of unemployment health insurance and weigh the advantages and disadvantages.:

1. Join your spouse's health insurance plan.

If it's possible, joining a spouse's plan is typically the simplest choice.

In most cases, switching insurance plans is only possible during open enrollment. You can alter the benefits of your health insurance during the open enrollment period. A spouse can also be added to a health plan during this period.

However, certain life circumstances, such as getting married, having a kid, or leaving your job, qualify for a special enrollment period. You and your spouse are able to modify or add insurance during this unique enrollment period

If you choose to join your spouse's health insurance plan, your spouse must talk to their employer about available options, purchase a policy, and add you to the plan. A plan's rates may increase dramatically if you are added to it, especially if your spouse switches from single to family coverage.

Advantages: The ability to continue in a group plan is advantageous because it is usually less expensive than switching to individual insurance or COBRA.

Disadvantages: Your spouse might have to pay significantly more for health insurance.

2. COBRA

For a long time when Americans lost their jobs and needed gap insurance before they were able to enroll in more affordable health insurance, the Consolidated Omnibus Budget Reconciliation Act of 1996 (COBRA), was one of the few practical solutions available.

People now have a way to purchase coverage under their employer-based group health plan thanks to COBRA. People who leave their jobs must have this choice available from employers with at least 20 employees.

You get to keep your current insurance plan for 18 months if you choose COBRA health insurance. However, its high cost is a downside. 

The typical annual family premium for an employer-sponsored health insurance plan is expected to cost over $22,000 in 2020, according to the Kaiser Family Foundation. Most of such expenses are covered by employers.

However, if you choose a COBRA health insurance plan, you will also be responsible for an administrative fee of up to 2%.

You have 60 days to decide whether to keep the COBRA insurance provided by your former employer.

Advantages: You get to temporarily keep your corporate health insurance.

Disadvantages: The cost will be significantly more than the health insurance provided by your prior company.

3. ACA exchanges and individual insurance

In the past, only young, healthy people could afford individual health insurance. Individual health insurance premiums were previously determined by your health status and any existing conditions. 

For those who were not in perfect health, this resulted in exorbitant premiums. A pre-existing ailment may even cause an insurer to refuse to provide health insurance coverage.

That changed with the Affordable Care Act (ACA). Health insurers must now accept you regardless of your health status, and if you're not in ideal health, you won't have to pay astronomically higher premiums.

An individual plan, often known as nongroup insurance, can be purchased from a health insurer directly or through the ACA exchanges.

Plans are separated under the ACA by level. The amount depends on the premiums, out-of-pocket expenses, costs that the insurer will cover, and the contribution from the member:

• Bronze: The typical health insurance payment under this plan for medical services is 60%. You pay 40%
• Silver: The typical health plan payment is 70%. You pay 30%
• Gold: The average health plan pays 80%. You make 20%
• Platinum: On average, a health plan pays 90%. You provide 10%

This means that if you select a Bronze or Silver plan as opposed to the others, you will pay lower premiums but greater out-of-pocket expenses. 

While Platinum and Gold have the highest premiums, they also have the lowest out-of-pocket expenses.

The costs of ACA plans are typically greater than those of employer-based health insurance. However, many participants in ACA plans might not notice a rise in premiums. 

To combat excessive costs, the ACA offers tax credits and subsidies with ACA insurance. Even more significant help is offered in California. The health insurance will estimate subsidies depending on your income when you are looking for an ACA plan.

Advantages: Plans include protections under the ACA, including the 10 essential health benefits, including maternity, outpatient care, and prescription medications.

‍Disadvantages: These plans may be more expensive than those provided by employers.

4. Short-term health plans

For the majority of Americans, short-term health plans provide an affordable method to cover the time between employment.

"Short-term medical insurance is a sort of health coverage that is valid for a set period of time. The majority of states permit 30- to 364-day short-term medical plan terms, according to John Bartleson, owner of Health Benefits Connect, a company with its headquarters in Englewood, Colorado. 

These plans are excellent for those who are between jobs as well as students, self-employed individuals, and contract workers. However, there are few short-term benefits. The plans come at a high out-of-pocket expense. 

Americans are allowed to have a one-year short-term plan that can be twice extended. Therefore, the duration of these short-term plans is three years.

However, some states forbid short-term plans altogether, while others only permit them for a period of three or six months.

These plans are not subject to ACA regulations. Therefore, the 10 necessary health benefits are not required to be offered by short-term plans. 

Prescription medicines, mental health care, and maternity are typically not covered by short-term insurance policies. Each and every one of those services would require payment from you.

When you're between employment, these plans can act as a stopgap, but they can be pricey if you end up requiring medical attention.

Advantages: Affordable premiums.

Disadvantages: Exorbitant out-of-pocket expenses, little coverage, and prohibition of short-term plans in several areas.

5. Medicaid

Your eligibility for Medicaid may be determined by your income and place of residence. Low-income Americans are covered under Medicaid.

The main reason that millions of formerly uninsured people now have health insurance since the ACA is that thirty-eight states expanded Medicaid. People whose incomes are up to 138% of the federal poverty line are covered by the Medicaid programs in those states. For a family of four, that works out to nearly $35,000.

Visit the Medicaid website for your specific state to apply for coverage.

Advantages: Affordable choice with low out-of-pocket expenses and consumer protections.

Disadvantages: You must meet income limits and it could be difficult to locate a physician who accepts Medicaid.

6. Alternatively, you can also apply for Medicare if you're 65 or older

When a person turns 65 or has been receiving Social Security Disability Insurance benefits for at least 24 months, they are eligible for Medicare.

The federal government's health insurance program known as Medicare provides medical coverage for the elderly and disabled citizens of the United States.

With this program, you may relax knowing that your medical expenses will be covered in your later years. Two options: Original Medicare or Medicare Advantage are available to Medicare recipients.

• Original Medicare: Part A (hospitals) and Part B (physicians) make up Original Medicare. Prescription drug insurance is not provided by Original Medicare, but it is available through Part D plans.
• Medicare Advantage: Medicare Advantage (Part C) plans, which integrate hospital, physician, and prescription medication benefits and may also include additional benefits like dentistry and vision, are usually offered by private insurance firms.

Advantages: Medicare has very low monthly costs

Disadvantages: Hospital stays can still be very expensive.