5 Best Health Insurance Options for Unemployed Workers

When you're unemployed you will be faced with a lot of choices when deciding what to pay for and what to cut out of your budget but health insurance shouldn’t be one. It’s hard to find affordable care if you were previously on your employer’s health coverage. Luckily, there are many options for health coverage even for the unemployed from government-backed coverage to alternative options that just cover your basic needs. 

One alternative option that might work for many people is to use a basic health coverage provider. Mira offers an affordable option that only costs $49 per month per person and can get you access to urgent care coverage, lab work when you need it, and hundreds of discounts on your prescriptions. You can sign up in minutes and get access to coverage the same day.

5 Best Unemployment Health Insurance & Coverage Options

The best health insurance or coverage options for unemployed workers ranges from getting on government-backed health insurance to paying for the COBRA coverage offered by your past employer. There are also other lesser-known options that could be more affordable or be a good fit for your personal needs. You’ll need to decide how much coverage you need and for how long you’ll want this gap coverage to exist before pulling the trigger. 

The 5 best unemployment health coverage options are: 

1. Indemnity Insurance
2. Medicaid or CHIP
3. Alternative Basic Health Coverage
4. COBRA Insurance
5. Individual or Family Plan

Health Indemnity Insurance

An indemnity insurance policy guarantees an individual compensation for losses or damages sustained by a policyholder. For a health insurance indemnity plan, this means that you receive monetary compensation every time certain things occur like going to a doctor for a check-up or spending the day in the emergency room. These plans don’t guarantee coverage for the full amount you’ll owe the healthcare provider but they do promise you some type of payment to help pay for those costs. 

You can think of this option as reverse health insurance as you’ve come to know it. Basic health insurance charges you a monthly fee for guaranteed coverage, typically with providers that the health insurance company has negotiated prices with in advance. You’ll likely have a deductible on your health insurance plan where you’ll have to pay out of pocket, in addition to your premium payments, before the plan covers any of your expenses. 

Most health indemnity insurance plans will also charge a monthly fee or premium, but then you’ll just receive certain amounts for the type of visit or procedure that you undergo, regardless of what health care provider you go to. These types of plans are usually marketed as additional plans on top of whatever type of coverage you generally have. They go well with both traditional health insurance and other alternative coverage options on this list. 

This could be a good option for unemployed workers as well since a lot of these plans are more affordable than most high-deductible plans so if you’re going to be paying for insurance while you’re unemployed at least if you have to go to the doctor you’ll receive some type of compensation to help offset the healthcare costs. 

Medicaid or CHIP

Medicaid is a government program for low-income people to receive the health care that they need. Medicaid typically covers all healthcare costs as long as your provider takes this type of insurance. The insurance plan is funded by a combination of the federal government and more local state governments, administered by the state you live in. 

Eligibility for Medicaid is based on your modified adjusted gross income (MAGI). This system considers both your taxable income and tax filing relationships to determine who in your family is eligible for Medicaid with you. The income threshold increases the more dependants you have living with you. You should check your state’s government website or the federal government’s Medicaid state overview list for more information. 

The Children’s Health Insurance Program (CHIP) is also a government-backed health insurance program that provides low-cost health coverage to children and families that earn too much money to participate in Medicaid. Each state sets the requirements and eligibility for CHIP with each having different income thresholds, different costs to participate, and some even cover pregnant women. 

If your income is at the level that you can qualify for one of these two types of insurance then it will be the option with the most coverage for the least amount out of your pocket. Applying for Medicaid in your state will automatically get you a notification on whether you qualify for CHIP or not. 

Alternative Basic Health Coverage

There is a huge gap in coverage needs for individuals and families. Insurance is too expensive for many that are self-employed or unemployed but these individuals still need basic health coverage in the event they get sick, need prescriptions, or need to get some lab work done to catch illnesses early enough for them to be treated properly. 

There are different versions of alternative basic health coverage but the one that is revolutionizing health coverage for this target group of people is Mira. With Mira, you can pay a very affordable $45 per month and get health coverage at urgent care clinics when you’re sick. You also get massive discounts on a lot of common prescriptions, sometimes being more affordable than they were with your previous insurance. Plus, you can get lab tests done as you need. 

Alternative health coverage is a great coverage option if you don’t think you’ll need to spend too much on the actual healthcare while you’re unemployed but want something in case you need it. You can sign up within a few minutes and get coverage as quickly as the same day. 

COBRA Insurance

The consolidated omnibus budget reconciliation act (COBRA) provided an option for you to continue your health coverage if you were recently laid off or let go by your employer. Typically, individuals will be required to pay the entire premium so your employer won’t be contributing whatever part they were paying on your behalf previously. But you’ll get the same coverage for a limited amount of time after your potential loss of coverage (typically 18 or 36 months). 

COBRA can be very expensive but it is necessary for those who become unemployed during a serious illness. Other insurance plans might find it difficult to cover your preexisting condition if you’re in the middle of treatment. Many plans won’t have to cover you if you have a lapse in coverage so getting COBRA until you have your new plan is a must in that scenario. It’s likely too expensive for most other scenarios and other options on this list might work better for you.

A health broker we spoke to (who preferred to be anonymous), “Continuing with your employer-sponsored healthcare plan is a great option right now because the government is currently subsidizing COBRA premiums for qualifying employees who have lost coverage. The subsidy was passed as part of the American Rescue Plan Act.” 

Individual or Family Health Insurance Plan

That last option for unemployed workers is to get an individual health insurance plan via a marketplace or by going directly to an insurance broker or provider. These plans will have similar coverage options like your employer might have offered to you with “bronze”, “silver”, and “gold” options for coverage. The gold plans provide the most coverage but have the highest monthly premiums. 

Most people will qualify for one of these plans and you can sign up via a provider’s website or directly on the government’s healthcare website. Based on your income you could be eligible for tax credits to lower the total monthly premium costs of the plan you choose when you sign up via the government’s marketplace. These tax credits take place immediately when you sign up and your monthly premium is just less. You can get them if you go through the provider’s website but the credit will be retroactive when you file your taxes. 

This is a good plan if you need a lot of coverage because you’re worried about a potential illness or a catastrophic event taking place. In fact, you can get everything from coverage that will pay for pretty much all of your costs to just a catastrophic insurance plan that you still pay out of pocket for your healthcare but is there to put a cap on how much you could pay out of pocket if you have a serious accident or event that takes you to the hospital for an extended period of time. These plans offer great coverage flexibility but still might be too expensive for your needs. 

According to insurance agent Nick Shrader, “You can buy a health plan in the marketplace. Sixty days after your health insurance coverage becomes ineffective due to job loss, you qualify for a special enrollment period. It is the best time to look for and purchase insurance that will help you get through your jobless times.”

Why the Unemployed Should Have Health Coverage

Many people who become unemployed will choose to “risk it” without insurance since there is now no tax penalty for not having coverage. This is risky for individuals and families and often leads to people not getting the healthcare that they need. It’s important to have the right coverage for your personal situation so that you can get access to the care you need when something happens, unexpected or not. 

Here is some insight we received from professionals throughout the industry: 

According to Joseph Torella, President of Employee Benefits with HUB International’s East Region, “The challenge I believe we need to address in the US is identifying those who truly need health insurance and creating a path for coverage. Overhauling the entire system or blowing up the employer-based model is an untenable solution. Rather, identifying those at-risk and/or unable to find a permanent policy (or a bridge solution) is an area where friendly legislation by the government would be welcomed.”

While our system certainly needs improvement, each individual still must decide if health care insurance or an alternative coverage plan is right for them. 

Alex Kronk of The Health Plan Critic says “Yes, the unemployed should absolutely get health insurance. Health insurance is something you do not want to be caught without. Expenses related to healthcare can be incredibly costly and are one of the largest reasons for bankruptcy. While health insurance can be expensive, there are options for cheaper plans that can cover disastrous events.”

And finally, as a conclusion to whether or not unemployed individuals should get health insurance, Donovan Pyle, the CEO of Health Compass Consulting said “Your decision to buy health insurance or not should be based on your individual risk tolerance, budget, and needs.”

Bottom Line

There are plenty of healthcare coverage options for the unemployed, depending on what your coverage needs are and how much you can afford. It’s important to balance those two things and explore what options make the most sense for you. 

If you’re looking for an affordable and basic coverage option to fill the gap of your situation then you should consider Mira. For as little as $45 per month, you can get coverage in case you get sick or get the prescriptions and lab tests you need. 

Sign up today and within minutes you could be covered.