What options do people have when they lose health insurance?

It should come as no surprise to anyone who's seen the national unemployment statistics over the past several weeks that the job market is dire. Tens of millions have lost their jobs, and with them, the health insurance many of their previous employers provided them with. However, that does not mean they are now out of options when it comes to finding coverage with varying degrees of affordability.

Estimates as to how many Americans are going to end up without some sort of health insurance because of the economic downturn and resulting job losses vary (sometimes widely) but it's largely accepted that the number will be in the higher seven digits. Indeed, Quote Wizard's most recent estimates place the number somewhere between 5.1 million and 9.8 million. That number, of course, is much lower than the number of people who have lost their jobs – or will do so in the before the downturn reverses course – so it's worth considering what safety nets exist to catch people.

Understanding the situation
For one thing, several states have expanded their Medicaid programs in recent years to an extent that many people who are out of work would be able to qualify for coverage. Meanwhile, the states where expansion has not happened are also those most likely to suffer the highest increases in uninsurance as accompanied by unemployment. However, even in states with broadly expanded Medicaid coverage, uninsurance rates are likely to grow sharply as unemployment approaches and perhaps surpasses 20%, which could occur in the coming weeks.

But even in those cases, people who lose coverage and become infected with the novel coronavirus may be exempted from paying for treatment in certain situations.

With unemployment rates rising, people may still have opportunities to find insurance coverage.

An issue of education
In many cases, when people lose their job, health insurance may be on their mind, but they may not know what their options truly are. To that end, state officials are now trying to get the word out about how and when people are able to obtain coverage in the event of job loss. New Jersey is one such state that brought back its outreach program normally reserved for the national enrollment period that opens around the end of each year, according to NJ.com. The Garden State is also planning its own exchange – to be launched before the end of 2020.

However, Rep. Frank Pallone Jr., told the newspaper that even special enrollment periods sparked by job loss don't necessarily insulate people from the risk of losing coverage, such as if they did not have health insurance through their jobs in the first place.

Potential avenues
By some estimates, as many as roughly 4 in 5 people who lose their jobs will be able to obtain at least some form of subsidized coverage, TIME magazine noted. That includes eligibility for both Medicaid and special enrollment periods available through the Patient Protection and Affordable Care Act's marketplaces. In the latter case, the standards for eligibility and enrollment may vary by state, as while there is a federal baseline, some may have even more expanded options. Often, the unemployed will qualify for steeply subsidized coverage.

For those who are able to sign up for health insurance via Healthcare.gov or state exchanges, however, experts note that time is of the essence. People only have within 60 days of losing their jobs to qualify for their special enrollment period on those marketplaces. As such, it's vital for anyone who loses employer-provided coverage to prioritize their assessment of the various options that may be available to them, including whether they qualify for Medicaid given their state of residence, whether their children might be eligible for the federal Children's Health Insurance Program, and so on.

They may also be able to sign up to keep their previous health insurance via COBRA, but doing so can be extremely expensive and out of reach for people who lose some or all of their income.

What's the breakdown?
Data from the Kaiser Family Foundation shows that 61% of people in the households of workers who lost their jobs as of May 2 received their health insurance through an employer-sponsored plan. Another 17% were on Medicaid, 9% were uninsured, 7% purchased coverage on the individual market and 6% were either covered by Medicare or military plans.

Of those who had lost their jobs as of the start of May, about 56% of those in households where people who lost their employer-provided coverage simply became uninsured between March 1 and May 2, while another 40% retained that coverage for at least some time. An estimated 3% or so were able to obtain alternative coverage in short order.

Insurers, then, certainly have their own role to play when it comes to educating people about their options when they lose coverage. Allowing workers to slip through the cracks could be a net negative for all involved, so a little outreach could go a long way.