Health insurance options for the unemployed

There are five types of health insurance options that may offer coverage to a person during a period of unemployment. Since most Americans get their health insurance through their employer, each of these options is relatively less popular and so it may be necessary to do some additional legwork to find the best insurance plan available in each situation.

Spouse's group insurance

The spouse's employer-provided group coverage may be available to spouses and dependents who are no longer eligible for other group insurance. The advantage is that acceptance is guaranteed, including coverage for a pre-existing medical condition, if application is made promptly after losing other insurance. The disadvantages are that this coverage is expensive, the federal cost subsidy does not apply and the employer's plan may not cover the same network of doctors and hospitals. For more information, refer to the spouse's health plan documents and the company's HR department.

COBRA insurance

COBRA is the acronym for the federal law that lets you keep your employer group coverage for a limited time after you leave the job. Some states have similar laws that expand this benefit to the employees of smaller companies. In some cases the cost is subsidized by the federal government for up to 9 months of coverage. Details are covered elsewhere on this site.

The advantages of COBRA are that coverage remains the same as during employment. Coverage continues for pre-existing medical conditions. The disadvantages are that COBRA can be expensive, even with the government subsidy. The subsidy expires after 9 months and the insurance usually expires after 18 months.

Short term major medical insurance

For coverage from 1 month to 36 months, short term major medical insurance is the most popular solution. The advantages are that this insurance is likely to be the least expensive, the enrollment process is simple and immediate, and the insurance covers any doctor or hospital. Coverage can usually be effective within hours after an online application. The disadvantages are there is no coverage for pre-existing medical conditions and the federal subsidy does not apply. For more information, see OnlineAdviser. Description of benefits, pricing and enrollment are all available online.

Private individual/family coverage

Private insurance is the most portable and stable type of longer term health insurance protection. This may be the best choice for those starting a business or working in a consulting or independent contractor position. These plans are divided into two types: major medical and supplemental. Major medical covers the bulk of catastrophic medical bills. Supplemental provides cash to the insured to help with out-of-pocket medical expenses and loss of income. Both types of coverage are important; never assume that one policy provides both types of protection. The advantages are that these plans may be customized to make the premium more affordable and you may keep the coverage until age 65 or Medicare eligibility. For healthy applicants the cost is likely to be lower than COBRA or spouse's group coverage. The disadvantage is that the insurance is medically underwritten so those with serious medical conditions may not qualify for the best rates. For more information, see the state-by-state listing and quotes for low cost, high quality choices at OnlineAdviser.

Public programs

Every state offers at least one health plan for people who are unable to obtain other health insurance coverage, are low income earners, or have depleted their assets paying for uncovered medical expenses. Eligibility varies from state-to-state but us usually based on age, residency, income, medical condition, and previous health insurance options. These plans are an important option for those who cannot find coverage anywhere else and can prove that their financial resources are exhausted because of the medical conditions or other events. The advantage is that these plans are available at little or no cost to those who qualify. The disadvantages are that the application process through local social services offices can be burdensome, no online application is available, a limited number of physicians participate, waiting times for treatment can be lengthy and physicians cannot recommend treatments not approved by the health insurance plan. For more information, see your state insurance department Web site for contact information for local public health insurance plans.

From this brief description of the types of health plan choices available, we can see that the selection is best made by considering the length of time coverage is needed, financial resources and health history. Those in good health with the ability to pay for health insurance have more options than those who are limited in either respect. OnlineAdviser service can help with free personal e-mail support with specific questions about locating the best insurance options. provides help with COBRA issues

COBRA continuation coverage may provide temporary protection when changing jobs, going through a divorce or negotiating other life transitions. Choosing the right health insurance is crucial to protect your health and financial security.