Spending and Saving

The No Insurance Survival Guide

Cobra coverage is supposed to provide relief from health insurance worries after you get laid off, but it’s no panacea. First off, it’s expensive: A study by Families USA found that Cobra premiums eat up 30 percent of unemployment benefits for the average American; in some states, a family policy can cost more than your total benefits. Not everyone who loses their job is eligible. And, as we have personally learned, it’s not always easy to get the coverage you’re entitled to.

Even if you’re straining to pay for Cobra, it might be worth sticking with the program, since the stimulus bill passed in February calls for the government to subsidize premiums. (Read official details here; a story in this week’s L.A. Times can save you from wading through bureaucro-speak.)

But what if you were never eligible in the first place? What if your company went bankrupt, or your coverage has expired? You could go uninsured, but if you’re hit with a medical crisis, you’re screwed. You could try to get individual insurance, but be prepared for sticker shock. Instead consider these creative strategies.

Join a Group
A range of organizations, including AARP and the Freelancer’s Union, offer group policies. Check your alumni association and any other groups you’re affiliated with. If they have nothing available, hunt down one you can join. There’s often a membership fee involved, and there may be restrictions, but that’s nothing compared to a hospital bill.

Go Back to School
More than half of U.S. colleges offered student insurance plans in 2007-2008, according to a federal government report. You don’t necessarily have to become a career student o participate–many let part-time students sign up. But some colleges are onto this strategy, and if they do let part-timers get insurance, they require a minimum number of credit hours.

Check with the State
Many states have programs to help people get health coverage—especially kids. Massachusetts, for example, has the Children’s Medical Security Plan. New York’s version is Child Health Plus. CHP’s costs vary according to your income level, but the caps are relatively high–a family of four can earn almost $90,000 a year and qualify for reduced premiums of $40 per child per month. And the underlying coverage comes from major insurers, which means you can keep your doctor, if he or she is in the network you pick.

There are related plans, such as Healthy New York, which offers streamlined medical coverage to small businesses and working individuals, Family Health Plus, and Medicare and Medicaid. But their income limits are typically much lower.

Get (or Stay) Hitched
The recessionary version of marrying for money may seem a little distasteful. But if you’re already in love, why not also have preventive care? On the other end of the relationship lifespan, we know someone whose divorce has been held up, in part, by his estranged wife’s reluctance to get her own health coverage. Can’t say we entirely blame her.

Go Catastrophic
Catastrophic health insurance plans are also called “high deductible” plans, for obvious reasons. You pay for ordinary medical care out of pocket, and the insurance kicks in when something really bad—and expensive—happens. The deductibles vary, but can get into the $20,000 range. Out-of-pocket can be lower than if you were uninsured, because you can pay fees negotiated by in the insurer.

Or: Exercise, Quit Smoking, and Hope for the Best

Tags: children, health, spending, Spending and Saving, The Unemployed Life, The Working World