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How (and Why) to Get Health Insurance When Unemployed


Health insurance is so important, but it’s not on a lot of young people’s radar screens unless you start a family or get sick.

If your parents, university, or full-time employer provides health insurance, fortunately you don’t have to spend much time thinking about it. But what if you’re self employed or work only part-time? What if you’re employed today but lose your job tomorrow? Do you know where to turn for health insurance?

Why You Need Health Insurance

In case you don’t think you need health insurance, consider the possibility that you could be hit by a bus on the way home tonight. Next, consider the average costs of some regular medical expenses based on data from ChangeHealthcare.com, a site where consumers can share and compare medical expenses:

  • Emergency room visit: $1,200
  • MRI: $1,800
  • X-Ray: $250–$600
  • Fracture: $500–$3,000

Finally, consider that every other test, every follow-up appointment, and every prescription you need will dramatically add to the above costs. Health insurance, even a minimal amount, is one of the smartest financial decisions you can make.

Health Insurance for the Unemployed and Self-Employed

The reason why health insurance is such an important employee benefit is because it’s so expensive, and employers get discounts for buying group policies for all their employees. That said, freelancers, entrepreneurs, part-time workers, and everybody else not working for the man can go out and buy health insurance on their own. It’s just expensive. Comprehensive health insurance plans for a single policyholder can be well above $500 a month.

Of course, these kinds of health insurance policies—HMOs and PPOs—are expensive because they let you see most doctors for a $20 copay and will require very little additional out-of-pocket expenses, no matter what happens to you.

You can, however, get much more affordable plans that may not reimburse your gym fees and acupuncture sessions, but will save you tens of thousands if you wipe out snowboarding this weekend and end up in a body cast. These so-called catastrophic health insurance plans can be yours for much less. Regular checkups and prescriptions may not be covered under these plans, but they’ll kick in to cover the big expenses if you require procedures or a hospital stay.

If you recently left your job—whether you were laid off or quit—you are also eligible for COBRA health insurance. Under federal law, you can continue to subscribe to the health policy you were receiving at work for up to 18 months, but you’ll have to pay the entire premium. (Most employers pay a big percentage of this while you’re on the payroll). Therefore, COBRA coverage will end up being expensive and you might be better off with a cheaper catastrophic plan.

Finding Your Own Health Insurance

There are a number of health insurance comparison Websites out there on which you can search and compare health plans based upon your needs. One site, eHealthInsurance, stands out in part for the sheer number of options it provides—thousands of health plans from hundreds of providers.

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About David Weliver

David Weliver is the founding editor of Money Under 30. He's a cited authority on personal finance and the unique money issues we face during our first two decades as adults. He lives in Maine with his wife and two children.

Comments

  1. Some more reasons to get it:
    Car accident? Slip and fall? Have to call 911? The uninsured can spend $500 to wellllllll over $1000 for a single ambulance ride. Some people can ‘afford’ putting off a doctor’s visit, but sometimes you just can’t predict those accidents. Then come those collection agencies…

  2. I just checked the eHealthInsurance link, and they offer no individual plans in my area…the entire state of RI.

  3. In any event, you may be eligible for something low-cost. I know my sister has an income-based health insurance plan because she does not make a lot of money, and she also suffers from a debilitating condition. However, she also lives in an area where health insurance is a lot cheaper in general. I know in my area (NYC/LI) many people are just shit-out-of-luck because it’s yet another thing that tends to fall into the high COL expense.

  4. I am just speaking my mind here, in response to all the recent attention to healthcare insurance and the like, and while I am not totally convinced I need it, I can see the reasoning people who buy it/offer it use.

    The companies deduce statistics on how frequently you have been/are injured or sick, and based on how many clients they have and the type/amount of coverage you need, they offer a price. Now, what’re the profit margins for insurance companies? How likely is it that you’ll get hit by a bus? What kind of lifestyle/diet do you have? Do you exercise/drink/do drugs or have other risk factors?… these are all calculations the insurance companies use to deduce your feasibility to be insured. Insurance companies (most I’ve heard of anyways) make money. They spread the risk and costs associated with taking care of an individual/family, across millions of people so that it’s affordable. But they still make a profit, and the statistic I’m waiting to see, is the cost/benefit in dollars, of a single person whom leads a healthy lifestyle, buys the minimum insurance, and dies abruptly in their late 50s-70s of and has gotten less than $10k use out of his/her insurance, while having paid a few hundred dollars a month, over a few decades.

    Does this bother anyone else besides me? I’m not saying I’m right, but it’s discouraging to think that people get paid to be the middlemen between health care providers and individuals/families. If it wasn’t profitable for them, why would they insure us?