Unemployed and Uninsured

Unemployment rates are near a 30-year high – just over 8.5 percent at the end of 2011. In Dallas, the rate is just slightly better at 8 percent. That means a lot of people, in addition to not having a regular paycheck, are either paying to continue health insurance on their previous employer’s plan or doing without insurance altogether. The first alternative can be financially draining; the second poses a huge risk, particularly for families. If you’re out of work, are your only options COBRA or joining the ranks of the uninsured? You do have other alternatives. Depending on your particular situation, each has advantages and disadvantages.

If you do elect to remain on your employer’s plan, COBRA might be a cheaper option than you think. The stimulus bill of 2009 included a provision subsidizing the costs of continued coverage for employees for nine months – provided you lost your job between September 1, 2008 and May 31, 2010. But even if COBRA is an option for you, realize that coverage ends after 18 months, at which point your insurance provider must offer you another plan. But the premium is likely to be quite high and the coverage less than it was under your employer’s plan.

Many jobless individuals elect to shop for an individual plan rather than pay the high premiums associated with COBRA. This is a good option for families or individuals who don’t have existing health issues; for those who do, coverage may be harder to come by. A few states prohibit providers from denying coverage, but most do not. Because shopping for an individual insurance plan can be a lengthy, complicated process, it’s better to start before your COBRA coverage ends.

Higher-risk patients may be able to obtain coverage by seeking assistance from the state. Some states provide subsidies for people who cannot afford an individual plan but who don’t qualify for Medicaid. State-provided health insurance is typically minimal, but for those in extreme financial circumstances, it’s better than nothing.

Another option for Dallas residents who don’t anticipate being out of work for an extended period is short-term or temporary insurance. These plans can serve as a stopgap measure between the end of COBRA or employer coverage and the start of a new plan with the return to work. The plans typically cover someone from six to twelve months but can be limited to as little as 30 days. Cost is a benefit of short-term insurance, but among the downsides are no coverage of preexisting conditions or preventive care. Still, it can be a good option if you know your situation isn’t likely to last or if you need some kind of coverage before you can join someone else’s plan.

Whether you’re out of work in Dallas or somewhere else, you know that being unemployed comes with a lot of stress. Paying for health insurance, unfortunately, can be one of the biggest stressors of all. But it’s helpful to know that your options aren’t limited to coverage you can’t afford or none at all.