Unemployment Effects on Health Insurance

For most people, access to health insurance is tied to their job. Employers may offer health insurance as a benefit, and they usually at least offer access to a group plan with a reasonable premium. Unemployment will obviously affect this arrangement, however being unemployed does not mean you have to go without health insurance. Private- and government-sponsored options help cover the health insurance gaps unemployment causes.

Identification

• The effect of unemployment on health insurance access can be painfully direct. Namely, if you lose your job you are going to lose the health insurance benefits that came with it. There are steps you can take to maintain access to your insurance--at least temporarily--but losing your job means the costs and probably the structure of your policy will change.

History

• Health insurance in the United States has a history of being offered through private companies, with citizens being responsible for obtaining their own health insurance. As a job benefit and to offer insurance to groups, many businesses arrange insurance for their employees. When someone loses his job, there is not always a full-proof way to offer the individual affordable access to health insurance, though a number of programs have been put into place to help the unemployed.

COBRA

• Consolidated Omnibus Budget Reconciliation Act (COBRA)is a government provision designed to help unemployed people stay insured. COBRA makes it legal right for a person who loses their job to be able to continue to access group health insurance plan. This program is designed to bridge the insurance gap between jobs, but it is only valid for certain periods of time. Also, it only provides access to the previous group plan, it does not deal with increased costs or provide support to pay them.

HIPAA

• Health Insurance Portability and Accountability Act (HIPPA) is a federal law that requires that there be one insurer in every state that sells you a plan, and like COBRA, this law is primarily designed to help people who have lost their insurance because of unemployment. When you are eligible for HIPPA, you cannot be denied insurance because of something like a preexisting condition, but you may end up paying higher than average premiums.

Options

• People who lose their health insurance because of unemployment can look into a number of other options to try to remain insured. Many people are able to get coverage through a spouse's or domestic partner's employer. Family members that lose their insurance because they were on the work policy may be eligible for Medicaid. Also, some states have programs that offer alternatives and help lower costs for people whose health insurance was affected by unemployment.