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What Are Your Health Insurance Options if You’re Unemployed Due to Coronavirus?

If you’re unemployed or between jobs due to COVID-19 (coronavirus), you’re not just worried about when your next paycheck will arrive, there’s also that other thought in the back of your mind: What about my health insurance?

It’s easy to feel lost at sea if you’re out of work and no longer covered by your employer’s group health insurance—especially if you have a family dependent on your coverage too. 

But don’t lose hope. There are options out there to cover your health care until you’re back on your feet!

Health Care Options for the Unemployed During COVID-19 (Coronavirus)

We won’t sugarcoat it—being without health coverage is never a good feeling, especially not in a pandemic. But whether you have health insurance or not, remember that testing for COVID-19 is available at no cost to you.1 Whether you’ve been out of work for a while or you’re one of the 6.6 million Americans who just filed for unemployment due to the coronavirus pandemic, the good news is you do have health insurance options!2

Health Care if You’ve Just Lost Your Job

Life happens. And if you find yourself out of a job that gave you employer-based health care, these are your main choices for coverage: 

  • Government health insurance marketplace
  • Private health insurance marketplace

Let’s take a look at each of them in detail.

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Yeah, that’s a mouthful. No wonder we all just call it COBRA. To put it simply, COBRA gives you the chance to carry on your employer-based coverage for a limited period of time after you’ve stopped working for them. Big sigh of relief, right? Here are some of the upsides and downsides:

Advantages of COBRA

The good thing about COBRA is that it makes it mandatory under federal law for an employer to allow employees to pay to stay on their health care 18 months after they’ve left their job. This can also stretch to 36 months if you qualify.3

Disadvantages of COBRA

The not-so-great thing about COBRA is that it does mean you’ll pay the full cost of the health insurance premium yourself. So you’ll pay more than what you saw coming out of your paycheck when you were employed because your employer was subsidizing (aka paying for!) some of that health care premium. 

Do you have the right health insurance coverage? You could be saving hundreds!

Now, if this is going to break the bank, don’t worry! You can enter the general health insurance marketplace instead. But it’s always a good idea to speak to your employer before or as soon as you leave to get the lowdown on what your new COBRA premium might be. That way you have all your bases covered.

COBRA gives you the chance to carry on your employer-based coverage for a limited period of time after you’ve stopped working for them.

What Happens if You Change Your Mind About COBRA?

We’re all allowed to change our minds, and a couple of months of COBRA coverage might leave you thinking it’s just too expensive. Or maybe you got another job sooner than you thought you would and don’t need it anymore. What next?

If you’re still without coverage and you want to leave COBRA, you can step away from it and use the general health insurance marketplace if you’re still in the open enrollment period (during November and December). But there’s also the option to qualify for marketplace coverage during a special enrollment period outside of open enrollment. For more on that, keep reading. 

High-Deductible Private Health Insurance

If you don’t want to extend your employer’s coverage, you could move straight into the private health insurance market to cover you and your family. And it makes even more sense if you also have a Health Savings Account (HSA) because that HSA is there to help with out-of-pocket costs!

With an HSA, you’ll need to enroll in a plan with a high deductible, and that’s good for you because it means low monthly premiums. This is really important if you’re not sure when your next job (and paycheck) might come along. 

Marketplace Health Insurance

Losing your job is tough in so many ways, especially if it all went down suddenly thanks to the coronavirus. Losing your job at any time is a major life event. But whatever the reason you find yourself out of work, you can move straight to buying a health insurance plan in the government health care marketplace.

But whatever the reason you find yourself out of work, you can move straight to buying a health insurance plan in the government health care marketplace.

The Affordable Care Act (ACA) of 2010 (commonly known as “Obamacare”) gives unemployed workers the chance to apply for health care during a special enrollment period. This time frame is 60 days after you lose your employer’s health insurance coverage.4 That’s a big deal if you just lost your job and have a family dependent on you for health care.

And speaking of family, when you do apply for new coverage, you’ll find out if you qualify for any savings on your premiums, tax credits or low-cost coverage through Medicaid or the Children’s Health Insurance Program (CHIP).

Health Care if You’re Long-Term Unemployed or on Low Income

With everything going on in the world right now, there’s a chance you could find yourself out of work for a long period of time. Or you might be scraping by on a low income. But this still means you need health care. So what are your options?

There are ways to get coverage depending on how much money you’ve got coming in and the size of your household.


The clue is in the name: Medicaid gives aid and assistance to people with disabilities, the elderly, pregnant women, children, and families on low incomes. It’s available in all states to people who qualify.

So if you do qualify for Medicaid, how does it help? Well, it can reduce your monthly health insurance premiums and other costs like copayments, deductibles and out-of-pocket bills. That’s if you’re on low income or have a family to support.5 Medicaid eligibility is based on the size of your household and your income—not your job situation.

Medicaid eligibility is based on the size of your household and your income—not your job situation.

How Low Does Income Need to Be to Qualify for Medicaid?

Medicaid income levels are based on the government’s federal poverty line (FPL). These are dollar levels the government sets as markers to see if you’re eligible for benefits including Medicaid.

Let’s look at an example: The poverty line for a single individual is an annual income of $12,760.6 If your income is currently between 100% and 400% of this individual FPL, you’ll qualify for tax credits that lower your monthly health insurance plan. 

But what if (like many families) your total household income is too high to get Medicaid but too low to afford decent private insurance? There are still some other options for you to explore, and the good news here is the children in your house can still qualify for a Medicaid program called CHIP. In fact, in 2018, more than 9 million children were enrolled in CHIP, and enrollment is open year-round.7


Medicare, on the other hand, is different from Medicaid because its job is to provide hospital and medical care for specific groups that need it—like people over the age of 65 and anyone under 65 who has received Social Security disability benefits for more than two years.

Medicare also covers those suffering from end-stage renal disease (kidney failure) and amyotrophic lateral sclerosis (known as ALS or Lou Gehrig's disease).8

If you qualify for Medicare, your coverage will be split into Part A (hospital costs) and Part B (medical costs) along with Part D for prescription drugs. And just to make things more confusing, there’s Medicare Advantage (known as Part C), which bundles them all.

Tips if You’re Unemployed and Need Health Care

It might be impossible to predict when your job could be coming to an end, but there are things you can do to keep yourself ahead of the game and have a backup plan if you suddenly find yourself out of work and out of health insurance.

1. Start to find new coverage as soon as possible.

Even before you leave a job, there’s nothing wrong with talking to those helpful folks in Human Resources about your health insurance benefits and what will happen to them if you leave. You’ll be able to find out how much COBRA coverage will cost you and even use this info to decide whether to stick with COBRA or go it alone in the health insurance marketplace.

2. Have all your important details ready.

When you’re all set to talk COBRA or marketplace or even Medicaid, here’s the information you should have ready: your income, total household income, Social Security number, pay stubs, tax records, information about your current (or just ended) health insurance plan, and the number of dependents in your household.

3. Get advice from an independent insurance agent.

Not only will an independent insurance agent use the information we listed above to figure out the best insurance plan for your budget and needs, but guess what? They’re the ones in the know when it comes to your state’s laws too—because some states want you to apply for government-based insurance through the federal marketplace while others have a state-based marketplace and set their own levels of eligible income. Pretty confusing, huh? That’s why having an agent step in to make sense of it all is really helpful. 

4. Keep your emergency fund full.

An emergency fund is a must no matter what your situation is in life! But it’s uber important if you’re out of work and out of health insurance coverage. Your emergency fund takes away the worry of those unpredictable trips to the doctor and routine checkups that come with out-of-pocket costs. Having a fully funded emergency fund (3–6 months of expenses saved up) will give you the ability to pay for insurance during a gap period without all the stress.

An emergency fund is a must no matter what your situation is in life!

5. Think about a high-deductible health plan.

When you do decide on a health insurance plan to replace your employer plan, aim for a high deductible. If you’re not sure when your next job might come along but you need some good health coverage in the meantime, a high-deductible plan makes sense. Why? Because your monthly premiums will be low, and if you also have a health savings account (HSA) in place, you’ll save money on your taxes at the same time too.

Ease Your Health Insurance Worries With Help From an Expert

Here’s the truth: Trying to figure out your health insurance can be really overwhelming. So why not take the stress out of it and let an independent insurance agent guide you. They’ll be able to look at your insurance options and let you know where you could be saving money.

And remember, whether you’re looking for individual or family coverage or you want to see if you qualify for government assistance, being unemployed does not mean you’re up the creek when it comes to health insurance—nope, not even during the coronavirus.

Ready for some good advice and peace of mind from trusted insurance experts in your area? Start the process today by talking with an Endorsed Local Provider (ELP).


Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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