By far the most common and inexpensive insurance is the insurance you get through your boss (employer sponsored healthcare), but many working people don’t have this option because they work part-time or are freelancers who don’t qualify. 

If you are one of these working people, or if you don’t have a job at all, there are other options to get your health insurance coverage.

Recently lost your job? - COBRA

For most people who have just lost their job their first option is to sign up for COBRA.  COBRA stands for the Consolidated Omnibus Budget Reconciliation Act.  It is this Congressional act that requires employers to keep former employees on the company health insurance plan for up to 18 months after the employee was laid off.  The benefit of COBRA is that it allows you to not have a gap in your insurance coverage.  The drawback is that employees must pay the entire insurance premiums rather than matching a portion the cost, which means your insurance just went way up!  In general, laid-off employees pay about $350 for individual rates and $1,000 for family rates (source: Kaiser Permanente).

To enroll in COBRA contact your former employer within 30 days of your leaving the company, and ask your employer what you need to do to enroll in COBRA. Your employer will send you an application and other forms that allow you to choose the coverage you want and your payment plan. Submit these forms to your employer as soon as you can to start receiving coverage.

Short Term Insurance

Short term insurance is a pretty nice option for individuals without a history of medical issues who may only be unemployed for a short amount of time. This is achieved the same way you would purchase a normal plan in the open market; however, it is for a shorter, predetermined amount of time, which keeps the premium lower.

“Emergency” coverage ranges from $40 to $70 per month for a generally healthy 25 year old. If necessary, check-ups and physicals come straight from the pocket, but they cost only a few hundred dollars and are worth the low monthly premium. Most insurers allow month-to-month payment, so if the individual changes employers and receives health benefits, he can opt out at any time. Check out competitive quotes for short-term plans at eHealthInsurance. Companies like Assurant and HealthNet provide good options for young people in need of health care.

Individual or Family Health Insurance Policy (Long Term Insurance)

The next option available to you is a regular individual or family health insurance policy purchased in the open market (often referred to as non-group coverage). This is similar to purchasing auto insurance or homeowner’s insurance.  The drawback to this type of coverage is that you will not see the same discounted group rates you may have enjoyed through your employer-sponsored plan.  Long term insurance ranges from about $250 to $500 per month for healthy individuals, with a few thousand dollar annual deductible.

Another negative relates to pre-existing conditions. In some cases you may have to endure a 12-18 month waiting period before your new insurance company will pay claims for medical care resulting from the condition(s).  Many people believe the Health Insurance Portability and Accountability Act, known as HIPAA, requires health insurance companies to offer coverage to those with pre-existing conditions.  This is simply not true; rather it protects you from being denied coverage when switching employers who offer health insurance. It will provide you no such protection in the open market.

Medicaid

Medicaid is another option for those who are both unemployed or employed, but meet certain income requirements that demonstrate an inability to afford a healthcare policy.  This program might cover you and/or your children if you meet certain criteria.

Basically Medicaid is a joint federal-state health insurance program for individuals who meet near poverty-level income and asset qualifications. States usually provide Medicaid for individuals who receive federally-funded cash assistance payments, such as SSI. The set poverty-levels can vary by state so, for more information about Medicaid, contact your state's Medicaid agency, social service or welfare office.  Here is a link to the official Medicaid website.

Insurance Through a Group Association

Getting insurance through a group or association you belong to may be a saving grace.   Organizations like AAA and others offer discounted insurance rates for their members.  Unlike employer-sponsored healthcare, the group or organization will likely not pay a portion of your premium. The discounted rate is the only benefit you may receive when going this route. AARP members are an example of one of these groups.

Union Sponsored Health Insurance

If you work for yourself there are several reasons you might want to join the Freelancers Union.  Firstly, the union is a great way to network with other freelance professionals. Secondly, the Freelancers Union may help you find more work. Lastly, and most importantly, the union provides health insurance at pretty low rates. The cheapest deal in the union costs about $130/month with a $10,000 deductible. What does that mean? Basically, you pay discounted rates out-of-pocket for all medical expenses up to $10,000, and then afterwards all expenses are covered. So everything is covered in worst case scenarios without the possibility of long term debt.

Catastrophic Health Insurance

As the name implies, these policies are primarily designed to cover major emergency medical expenses. The cost is relatively low, because insured people must first satisfy a high deductible, ranging from $500 up to $15,000, depending on the plan purchased. These policies are not intended to pay for routine doctor office visits or trips to the emergency room for the flu, nor for preventative care, maternity care or mental health care. However, most catastrophic plans cover hospital stays, X-rays, and surgical expenses. Think of this as affordable medical coverage for the worst that can happen, which primarily provides coverage so your other assets do not get wiped out from the high cost of a true medical emergency.  People who get this coverage will need to be prepared to pay a deductible if they incur a serious illness or accident. If you have a pre-existing condition such as heart disease, cancer or diabetes, you are generally not eligible for this type of coverage. There are several Web sites that will compare catastrophic plans in your area and provide quotes for you, including gohealthinsurance.com and medhealthinsurance.com.

High-Risk Pool Insurance

High-Risk Pools are state-sponsored programs that offer insurance to those denied coverage in the open market.  Be careful of this coverage option as it is very expensive. Check with your state department of insurance to determine if your state has such a program.  If you are in this dire circumstance you should just file bankruptcy and get Medicaid.  With the high cost of healthcare you are probably well on your way to bankruptcy anyway.

Local Clinics

Some uninsured adults turn to local clinics for low-cost or free medical care for things such as routine visits or check-ups. Every major city has at least one local free clinic to help with the basics, but this is not a viable alternative for a major illness or accident, as hospitalization is not provided. If you decide to forgo health insurance, it does not mean that you can't still seek care from your family physician or local doctors; you will just need to pay as you go. And don't be afraid to negotiate those fees.