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Alternatives to Cobra for the Unemployed

Many people secure health insurance through their employer, and losing the job typically means losing the benefit. For anyone made unemployed, the Consolidated Omnibus Budget Reconciliation Act provides a way to continue employer health insurance for a period of up to 18 months following the loss of a job. However, consider alternatives to Cobra to help in securing a more affordable deal to maintain health insurance coverage.

  1. Alternative Group Health Insurance

    • Group health insurance is available through other sources than through an employer -- other groups and associations provide access to group coverage. Groups include membership organizations, such as professional institutions, alumni associations and special interest groups. Group health insurance plans offered by these types of organizations depends on remaining a member of the organization, therefore employment status has no effect. For those that have membership with such an organization, it can provide an option for securing health insurance if employer insurance is lost.

    Short-Term Health Insurance

    • Many insurance companies offer short-term health insurance plans, typically designed to provide coverage for a period of between one month and one year. Their intended use is to plug a gap in normal health insurance, and they can therefore provide an option for those that lose employer health insurance. This type of health insurance provides a temporary solution, allowing some time to sort out a more permanent solution. Typically, short-term health insurance plans cannot be renewed, although an individual can make a new application when an existing short-term policy expires.

    Medicaid

    • Those without the means to carry on paying the cost of health insurance costs because of losing a job can consider Medicaid. This is a state administered, government-funded program that offers assistance to low-income individuals and families to pay medical costs, with each state generally having its own guidelines and rules. Medicaid is a means-tested program, with those enrolled needing to meet the eligibility criteria. Individuals that become unemployed may find that they become eligible, and it can be worth pursuing as an option.

    State-Sponsored Health Insurance

    • Many states fund their own health insurance programs for individuals with low income, or those having difficulties gaining access to a suitable plan. The state insurance department will typically have information about these, with details available through a website or direct telephone contact. As with Medicaid, these typically have means-tested eligibility criteria, although checking the requirements can help in providing health insurance for those that have lost a job.

    Parents Health Insurance

    • Options for those under the age of 26 that lose a job include coverage under the health insurance policy of their parents. This option applies to all states, and can provide a temporary solution until such time that a dependent can secure their own health insurance. For a husband and wife that have separate health insurance policies, options to consider include the dependent receiving coverage under the policy of the parent with the best policy.

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