TheLoop21.com

By: Molly Miltenberger (Add to your loop)
Tue, 05/26/2009 - 00:00

What to do if you've lost your health insurance.

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The loss of a job means yet another big problem: the loss of health insurance and no way to pay for medical coverage at a time when 15 percent of blacks are unemployed, struggling to find work. But there are a few things you can do to work around this difficult situation or prepare for it. Insurance broker C. Steven Tucker from SBIS, who has given advice to The Wall Street Journal and Fortune Small Business Magazine, walked us through it.

If you're worried about now…

• Consider a Health Savings Account (HSA) qualified High Deductible Health Plan (HDHP) if you are without a job and health coverage. Tucker advised one “with the highest deductible possible.” Although it may go against your natural reaction, choosing a higher deductible is a move that will save money in the long run. “This is the lowest priced way to insure oneself against catastrophic medical expenses,” Tucker said, while “also building a unique tax deferred, tax deductible, interest bearing ‘Medical IRA’ that you can withdraw from without penalties” in case of medical emergency.

• Aim for a “balance between four important variables: wants, needs, risk and cost, before you spend your money,” Tucker said. Don’t pay for a service that you want but don’t need, like a low co-pay on prescriptions which you don’t use. Do weigh the risk of an emergency against the cost of paying a high deductible. The sound of a “high deductible” may be terrifying, especially if you have no income, but this is your best option. You'll have an easier time scraping together enough to pay the smaller premium bills, and you'll also guard against getting wiped out by one huge medical bill.

• Look into coverage from the Veterans Health Administration if you qualify as a veteran.

• Consider your options: could you start your own business? If you and one other employee work for yourselves as a business, you could be eligible for a group rate.

If you're worried you may lose your job and health insurance in the future…

• Think about your insurance coverage options right now. If you are at all worried about your job security, don’t leave health insurance to add to the problems you'll have to deal with later, after you have lost your job. 

• Start your research by looking at your options with COBRA. COBRA is the name of the law enforced by the U.S. Department of Labor that gives unemployed workers the right to continue with the group health benefits provided by their former employer for a certain period of time. “The problem with continuing with COBRA,” Tucker said, “is that you are continuing a health insurance plan that was designed and purchased by somebody else.”  

Although it may appear to be an attractive plan at first sight, you'll pay for it in higher premiums. “COBRA continuation plans typically have very low calendar deductibles,” Tucker said. “The lower the deductible, the higher the premium.”  

Do your research on the cost and the benefits, however, especially if you are troubled by a pre-existing condition. “If you have a pre-existing condition that would render you uninsurable on the individual major medical market,” Tucker advised you “contact your Human Resource department to find out what your Cobra continuation premium would be,” as long as you feel comfortable doing so.

• Look into purchasing an individual health insurance policy on the open market, unless you have a pre-existing condition that makes COBRA a practical option.  

• Find a good health insurance broker. Tucker said this should be your first priority. “It costs you nothing more to use an experienced and reputable Broker,” he explains, “All health insurance premiums are … pre-set by each insurance carrier before the product can be approved for sale in your state. This being the case, it is much safer to purchase your health insurance through a Broker, (which) will protect you against hidden exclusions and coverage caps, which can lead to catastrophic and entirely unnecessary out of pocket expenses.”

Answers for your questions: 

Insurance Blog: This helpful site answers lots of insurance-related questions.

National Association of Insurance Commissioners: Stay up-to-date on the new ins and outs of state health insurance regulations through one of Tucker’s favorite sites.

Small Business Insurance Services: Tucker’s blog clarifies insurance lingo and offers free advice for your search.

Molly Miltenberger is a freelance writer with a special interest in culture and community development. She is a recent graduate of New St. Andrew’s College and writes for Stereopathic Music.

Update 5.29.09: The original version of this story used the wrong last name for C. Steven Tucker. We apologize for the error.

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