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People often worry about what will happen to their health insurance when they change jobs.

Maybe you've lost your job and you're looking for health insurance coverage while you search for your next opportunity. Or it could be that you have a new job, but your employer doesn't start health insurance immediately, which means you'll be uninsured for a while.

What do you do?

You have multiple options depending on where you live, your income and your situation. That's due in part to the Affordable Care Act, also called Obamacare.

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How do you get health insurance between jobs?

The first thing to find out is when your previous employer is stopping your coverage. It may:

  • End your coverage immediately.
  • Wait until the end of the month.
  • Cover you for months, especially if you were laid off.

Find out when your previous employer is going to stop coverage. Once you know that, you can begin to plan what to do next.

If you're starting a new job, find out from the new employer when that coverage begins. You may find that you'll only be without insurance for days or a few weeks. In that case, you may decide to go without insurance temporarily.

What are your health insurance options when you’re between jobs?

There are multiple avenues for people looking for health insurance between jobs:

  • Get covered under your spouse's health plan
  • COBRA
  • Individual insurance/ACA exchanges
  • Short-term health plans
  • Medicaid

Let's review each option, as well as the pros and cons.

Go on your spouse's health plan

This is usually the easiest option if it's available.

Typically, you can't switch insurance unless it's during the open enrollment period. However, life events like losing your job, having a child and getting married, puts into place a special enrollment period in which you and your spouse can change or add insurance.

If you decide to go on your spouse’s plan, your spouse needs to speak to his or her employer about health insurance options, sign up for a policy and add you to the plan.

Pro: You get to stay in a group plan, which is usually less expensive than going with individual insurance or COBRA.

Con: The plan may not be as good as if you got an individual or nongroup plan.

COBRA

For many years, COBRA was one of the only viable options for Americans who lost their jobs. The Consolidated Omnibus Budget Reconciliation Act of 1996 (COBRA) created a way for people to buy coverage under their employer-based group health plan. Employers with at least 20 employees must provide this option for people who lose their job.

The benefit of COBRA health insurance is that you get to keep the same insurance plan for at least 18 months. The drawback is it's quite expensive. The former employer no longer chips in, so you have to pay its share, too. You pay as much as 102% of the premiums.

The average annual family premiums for an employer-sponsored health insurance plan cost more than $20,000 in 2019. Employers pick up a majority of those costs. However, you’d have to pay for everything with a COBRA plan.

Pro: You get to keep your group coverage at least temporarily.

Con: It costs much more than your previous employer-based coverage.

Individual insurance and ACA exchanges

Individual health insurance was once only affordable to people who were young and in perfect health. Before the ACA, health insurers could impose individual health insurance premiums based on your health status and pre-existing conditions. That led to sky-high premiums for people who weren't in excellent health. An insurer could even deny coverage because of a pre-existing condition.

The ACA changed that. Now, health insurers must accept you regardless of your health status and you won't have to pay exorbitantly higher premiums if you're not in perfect health.

You can get an individual, also called nongroup insurance, plan either as part of the ACA exchanges or off the exchanges.

The ACA divides plans by metal level. The level depends on the cost of premiums, how much cost the insurer will cover and how much the member will pay:

  • Bronze: Health plan pays 60% on average.
  • Silver: Health plan pays 70% on average.
  • Gold: Health plan pays 80% on average.
  • Platinum: Health plan pays 90% on average.

What this means is you pay lower premiums, but more out-of-pocket costs if you choose a Bronze plan compared to the others. On the other hand, Platinum has the highest premiums, but the lowest out-of-pocket costs.

Individual plan premiums, both on and off the exchanges, have increased faster than employer-based plans over the past decade. In recent years though, individual health plan premium increases have been similar to employer-sponsored plans.

Many members in ACA plans may not notice premium increases, though. The ACA provides subsidies to insurers for lower-income people in those plans to offset high premiums. The law allows for people who make less than 400% of the federal poverty limit to get tax credits or subsidies. California has even more generous assistance.

Pro: Plans offer ACA protections, including the 10 essential health benefits, such as outpatient, maternity and prescription drugs.

Con: These plans can be expensive if you're not eligible for government subsidies.

Short-term health plans

Short-term health plans are a low-cost way to help bridge the gap between jobs.

Short-term coverage is limited. The plans have hefty out-of-pocket costs. Americans can have a short-term plan for a year and request to extend it twice. So, these short-term plans can last up to three years now.

However, some states don't allow these plans and others limit them to only three or six months.

These plans are exempt from ACA rules. This means short-term plans don't have to provide the 10 essential health benefits. Most short-term plans don't cover maternity, prescription drugs and mental health services. You would have to pay for all of those services.

Pro: Low cost.

Con: High out-of-pocket costs, limited coverage and some states forbid short-term plans.

Medicaid

Depending on your income and where you live, you might be eligible for Medicaid. Medicaid covers low-income Americans, but now lower-middle-class people are eligible in many states after the ACA allowed states to expand the program.

Three-dozen states have expanded Medicaid. That expansion is the primary reason millions of previously uninsured people now have health insurance since the ACA.

Those states’ Medicaid programs cover people whose salary is up to 138% of the federal poverty limit. That's about $35,000 for a family of four.

Pro: Low-cost option with consumer protections and low out-of-pocket costs.

Con: You have to meet income requirements and not all doctors take Medicaid.

Shop around for health insurance

If you're out of work and need a health insurance plan, make sure to explore all of your options. You can start with our What's the Best Health Insurance Option for You?

If you're shopping for a health insurance provider, you can also use Insure.com's list of the Best Health Insurance Companies to compare and find one that best suits your needs. You can also use the Health Insurance Advisor tool to identify what type of coverage you need.

Here are some steps to take:

  • Explore your spouse's employer's health insurance options.
  • Read through the COBRA information that your previous employer sends you and see whether that plan would make sense for your situation.
  • Go to your state's ACA marketplace, enter your information and see how much those plans would cost you.
  • See if there are individual health insurance plans not part of the ACA exchanges that might work better for you.
  • Check into a short-term plan if that interests you.
  • Figure out if you're eligible for Medicaid in your state.

Taking these steps will help put you on the path to getting a health insurance plan that works for you, whether an Obamacare plan or not. Being between jobs can be stressful. However, finding a health plan that bridges your insurance gap until a new employer covers you will relieve some of your stress while you're out of work.