Get the Cheapest Health Insurance When Unemployed
Get the Cheapest Health Insurance When Unemployed
Find Cheap Health Insurance Quotes in Your Area
For most people who are unemployed, we recommend getting insurance through the Affordable Care Act (ACA) health insurance marketplace.
Although there are several ways to get coverage, the most cost-effective option will be with a plan that reduces your health insurance costs based on your income, as ACA marketplace plans do. For example, a health insurance plan for someone who is recently unemployed can cost $47 per month. That assumes the person chooses a cheap Bronze plan and their total income for the year is $35,000, including the parts of the year when employed.
While Medicaid is even cheaper than the ACA marketplace, it's only available for those who meet the income requirements, which can be less than $18,754 for individuals in many states. If you recently lost your job or your spouse is employed, it will be harder to qualify for Medicaid because other income sources, including unemployment income, are included when determining eligibility.
When shopping for coverage, watch out for short-term health insurance plans and their high deductibles. The cheap prices of these plans are attractive, but before the benefits kick in, you could have to pay thousands of dollars out of pocket for medical care.
5 best health insurance options for the unemployed
For those who are unemployed or recently lost a job, there are five methods for getting a health insurance plan:
Type of health insurance | Details | How to qualify |
|---|---|---|
| Medicaid & CHIP | Low- to no-cost public health insurance for those with very low incomes. Especially useful for families with children. | Eligibility is based on income and family size (not employment status). |
| ACA plans | Private health insurance with different coverage tiers, and many people qualify for discounted rates. | Automatically eligible when you lose your health insurance or during fall open enrollment. You can't be denied coverage because of a preexisting condition. |
| Join a family member's plan | Coverage will vary based on the insurance plan and is a good option for spouses, dependents and students. | Losing insurance automatically qualifies you for a 30-day special enrollment period through an employer plan. |
| Short-term health insurance | Can provide quick coverage, but benefits are not usually as comprehensive as traditional health insurance. | Able to sign up anytime, but there's usually a medical questionnaire to qualify. |
| COBRA | Provides the same coverage that you had through your job, but costs can be high. | Automatically eligible to continue your job-based insurance after you stop working. |
Will you qualify for Medicare soon? Medicare is the best medical insurance for those who are over 65 or have a qualifying disability. If you're unemployed and expect to be eligible for Medicare soon, consider how to manage your costs and coverage in the interim. For example, if you only need health insurance for a few months, a short-term insurance policy may be a cheap way to fill the coverage gap.
How much does health insurance cost without a job?
The cost of health insurance will depend on the type of plan you choose. The cheapest option could be Medicaid, which is free to low-cost, or a plan through the ACA marketplace, which has a variety of coverage options and discounted rates based on income.
Find Cheap Health Insurance Quotes in Your Area
How do you get health insurance with no job or no income?
For most people who are unemployed, we recommend applying for health insurance on HealthCare.gov.
This portal will tell you if you qualify for programs like Medicaid, the Children's Health Insurance Program (CHIP) or discounts on marketplace plans. Each state is slightly different in its qualification criteria and process. However, starting from HealthCare.gov will help guide you to the programs and resources that are relevant for you.
Medicaid and CHIP
Medicaid and CHIP are public health insurance options that provide free or low-cost health insurance for those who qualify.
Benefits include medical care, checkups, hospitalization and prescription drugs. All children have dental coverage with Medicaid or CHIP. For adults with Medicaid, dental benefits vary by state.
Coverage usually begins immediately after you qualify, and most states determine eligibility in real time, so you'll know right away if you qualify.
Free health insurance for the unemployed
If you're unemployed, you could qualify for free health insurance through Medicaid. The state where you live can affect your eligibility. In order to qualify, you will need to meet your state's criteria for income, disability or pregnancy. Learn more about Medicaid and CHIP, including what you'll need to apply.
Medicaid eligibility
Medicaid eligibility is usually based on monthly income, so the sharp drop in earnings after losing a job could make you more likely to qualify.
However, unemployment income is considered when determining if you're eligible for Medicaid. With these benefits typically being about half of your paycheck when you were employed, you can roughly see how your prior income when you were employed could affect Medicaid eligibility when unemployed.
Also, states have different limits on how much you can earn to qualify for Medicaid. If you live in one of the 36 states with expanded Medicaid, you can qualify if your income is less than 138% of the federal poverty line (FPL). For example, that's an individual earning less than $18,754 or a family of four earning less than $38,295.
In Alaska and Hawaii, you can qualify with a higher income because the states have higher FPL amounts and have expanded their Medicaid program. Other states without expanded Medicaid have a lower limit on how much you can earn in order to qualify, and you'll only be eligible if you earn less than 100% of the FPL.
Below are the monthly income limits for Medicaid.
Household size |
States without expanded Medicaid
|
States with Medicaid expansion
|
|---|---|---|
| 1 | $1,133 | $1,563 |
| 2 | $1,526 | $2,106 |
| 3 | $1,919 | $2,648 |
| 4 | $2,313 | $3,191 |
| 5 | $2,706 | $3,734 |
For 48 contiguous states
CHIP
If you need coverage for your family but earn too much to qualify for Medicaid, the Children's Health Insurance Program (CHIP) is a public insurance program that provides free or low-cost coverage for children. For example, you could qualify as a family of four earning $50,000 per year. That's $4,167 per month.
Your eligibility for CHIP is automatically determined when you apply for Medicaid or a marketplace insurance plan. And in most states, anyone up to age 19 can be eligible for coverage.
Costs vary by state, but your cost won't be more than 5% of your household income. For example, if your annual income is $40,000, your child's insurance policy won't be more than $167 per month.
ACA health insurance marketplace
For most unemployed people, a health insurance plan through the Affordable Care Act marketplace will provide the best coverage at the lowest rates.
Anyone can get coverage through the marketplace regardless of income, making it useful for those who are recently unemployed or seasonally unemployed. Plus, the amount you'll pay for a plan is based on your expected annual income, which helps to make insurance more affordable.
Frequently called "Obamacare" plans, health insurance plans on the marketplace are sold by private insurance companies. Plans are grouped into tiers — Catastrophic, Bronze, Silver, Gold and Platinum — making it easier to find the best level of coverage for you. You can also cancel your insurance at any time.
All plans provide comprehensive benefits for medical care, including free preventive care. You can't be charged more because of a medical condition, and you also can't be denied coverage because of a preexisting condition. For children, dental and vision benefits are included, and adults can add on dental coverage.
Cost of ACA marketplace plans
With the health insurance marketplace, the cost of plans will depend on a range of factors including your age, location, household size, the level of coverage you choose and if you qualify for discounted rates because of your income.
For those looking for middle-of-the-road medical benefits, the average cost for a Silver plan is $541 per month if you pay full price. This tier of coverage is best for most people because plans provide a balance between monthly costs and plan benefits.
For those who are young and healthy or who don't need much medical care, choosing a Bronze or lower-tier plan is a good way to save money, but when you do need medical care, you'll pay more out of pocket.
Those who have significant or expensive medical needs could get the best deal by choosing a Gold or Platinum plan. These plans will cost more each month, but the better benefits will mean you'll pay less for medical care, helping you save money overall.
Plan tier | Average monthly cost |
|---|---|
| Catastrophic | $313 |
| Bronze | $396 |
| Expanded Bronze | $432 |
| Silver | $541 |
| Gold | $592 |
| Platinum | $678 |
Based on rates for a 40-year-old who is paying full price.
Discounts and ways to save
Many people who are unemployed will qualify for ACA marketplace programs to reduce the monthly cost of health insurance and make health care more affordable. The amount you could save is based on your estimated annual income, which may include parts of the year you were employed.
Your marketplace application will automatically tell you if you qualify.
- Premium tax credits: These subsidies reduce the monthly cost of health insurance based on your annual income. Subsidies are available for all marketplace plans except Catastrophic plans, and the amount of the monthly discount is based on your total annual income.
- Cost-sharing reductions: This program improves an insurance plan's benefits, making medical care more affordable. It's only available for Silver plans and for those who earn 100% to 250% of the FPL. If you qualify, the program will lower a plan's deductible, copayments and out-of-pocket maximum.
For an example of how premium tax credits work, the full price of a cheap Bronze plan averages $336 per month, based on the most affordable Bronze plan in each state. After premium tax credits are applied, the cost drops to $47 per month, on average, for someone earning $35,000 per year. That's an 86% discount.
The final amount that you would pay for a health insurance plan varies widely. But the most important thing to remember is that how much you pay for health insurance is discounted based on how much you expect to earn over the entire year. Don't be shocked by seeing a high sticker price at first, before your discounts are applied.
Cheapest health insurance companies
- $338 per month
- $361 per month
- $377 per month
Monthly costs are for a 40-year-old purchasing a Bronze or Expanded Bronze plan with calculations based on CMS data for 2022 plans offered across eight states.
Timing and how to get coverage
If you lost your health insurance when you lost your job, you qualify for a special enrollment period (SEP) on the ACA marketplace. This lets you sign up for an ACA insurance plan midyear, starting 60 days before you lose coverage and ending 60 days after you lose coverage. If you miss this window, you need to wait for the fall open enrollment to sign up for insurance on the ACA marketplace. In most states, open enrollment starts Nov. 1 and continues through Jan. 15.
Join a family member's plan
If you're unemployed, you may be able to get health insurance coverage through a parent, spouse, domestic partner or another family member. This can be an affordable option because frequently an employer will contribute to the cost of the health insurance plan.
On average, it costs an additional $209 per month to add a second adult to an employer-sponsored health insurance plan.
Your actual costs will vary based on the plan's benefits and how much the employer contributes to the cost. Usually, if you qualify for medical coverage, you're also eligible for the associated vision or dental plans.
When can you get coverage
Losing health insurance coverage automatically triggers a 30-day special enrollment period (SEP), making it possible to update who is covered by a health insurance plan. This is shorter than the 60-day SEP that's available on the ACA marketplace. However, all employers must offer special enrollment because of the Health Insurance Portability and Accountability Act of 1996 (HIPAA).
When you join an employer or group plan, your health insurance coverage will begin on the first of the month after your enrollment.
Short-term health insurance or indemnity plan
A short-term health insurance plan can be a quick solution for getting health insurance coverage when you're unemployed or have no income.
The affordability of short-term health insurance plans is a major advantage. Plans cost an average of $124 per month. That's cheaper than the full price of an ACA marketplace plan. However, for those who qualify for discounted rates on marketplace plans, a short-term plan will usually be more expensive.
Benefits and coverage
A short-term insurance policy's benefits are usually different from a traditional health insurance policy. That's because short-term plans don't have the same regulations as ACA plans, so they may not cover maternity care, mental health or prescription drugs.
Plans can begin right away, making it a quick way to get coverage. But there is usually a health screening before you can enroll, and you can be denied coverage because of your age or medical conditions such as diabetes, cancer or heart disease. And even if you're able to get a policy with a preexisting condition, short-term insurance may not cover medical treatments for that condition.
Also, most short-term insurance plans have a very high deductible, so enrollees will have to pay for a lot of health care out of pocket before the plan starts contributing to medical care. You may also see some plans with a fixed benefit structure called an indemnity plan where they'll pay a set price for certain medical treatments regardless of how much they cost. For example, if you have an MRI, the plan could pay $250 toward the cost whether the bill totals $300 or $500.
Because of these coverage issues and the variations in plans, it's important to carefully review the plan's benefits and exclusions before enrolling.
Top short-term insurance companies for the unemployed
- $132+ per month
- $150+ per month
- $175+ per month
Availability and length of coverage
Many states have developed their own rules about short-term insurance plans, and therefore, access can change by location.
You can't buy short-term health insurance in 11 states and the District of Columbia. Across these locations, either plans aren't permitted or there are no companies selling short-term plans in the state. The states are California, Colorado, Connecticut, Hawaii, Maine, Massachusetts, New Jersey, New Mexico, New York, Rhode Island and Vermont.
The maximum length of a policy also varies by state. The total length of coverage, including renewals, can be as short as three months as in states like Virginia and Washington. Other states like Minnesota allow coverage for up to a year, and in Louisiana, coverage is allowed for a total of 36 months.
COBRA health insurance
COBRA, short for Consolidated Omnibus Budget Reconciliation Act, is a program that lets you continue the health insurance you had through a job even after you stop working for the employer.
With COBRA, the coverage details of your plan stay the same as when you were employed, but how much you pay for the plan will increase after you stop working for the company.
The change in costs is because you'll be paying the full price of the plan rather than splitting the costs with your employer. For example, while you were employed, you may have only been paying $75 per month for a $500 plan because your employer paid $425 as a part of your compensation. By switching to COBRA, someone in this situation would then be responsible for the full $500 cost.
COBRA insurance costs $596 per month, based on the average costs of employer-sponsored health insurance plans.
When should you use COBRA
COBRA is usually not the most cost-effective way to get health insurance. We recommend that you only use it for a few months or in the following situations:
- Stopgap to continue coverage while waiting for another policy to begin.
- To keep using a plan's benefits when you're receiving ongoing health care and you've already met the plan's deductible or out-of-pocket maximum. In this situation, the higher monthly costs of a COBRA plan are offset by lower medical costs because the plan details carry forward when it switches from employer coverage to COBRA.
Household coverage and plan types
Children and dependents can also get health insurance coverage through COBRA. You can also use COBRA to continue dental or vision insurance. However, sometimes you can get a better deal by shopping around for a stand-alone dental insurance policy.
Timing of coverage
You'll usually have 60 days to sign up for COBRA after losing coverage through an employer. And typically, you can keep COBRA for at least 18 months. There are no contracts, and you can cancel at any time.
For those considering both COBRA and a marketplace plan, the 60-day cutoff is important. During the first 60 days, both COBRA and the marketplace are options available to you. After 60 days, neither one will be an option, and you will have to wait until the fall open enrollment to sign up for a marketplace plan.
How long after losing coverage | COBRA | Marketplace |
|---|---|---|
| First 60 days | Can sign up | Can sign up using a midyear special enrollment period |
| After 60 days | No longer available | Midyear enrollment not available and have to wait until the fall open enrollment |
Getting marketplace coverage after COBRA
In most cases, losing health insurance coverage allows you to sign up for a marketplace health insurance plan any time of the year. But there are specific rules when transitioning off of COBRA.
How COBRA ends | Marketplace enrollment eligibility |
|---|---|
| If COBRA coverage runs out | You'll qualify for a special enrollment period, allowing you to enroll in a marketplace plan midyear. |
| Choosing to end COBRA early | You won't be eligible for midyear enrollment in a marketplace plan. Instead, you will have to wait until the fall open enrollment. |
| Choosing to end COBRA on Jan. 1 | To avoid coverage gaps, you can time the end of your COBRA plan with open enrollment. With this situation, you'll sign up for a marketplace plan in the fall, and your coverage will change over on Jan. 1. |
What types of income are considered when applying for Medicaid or discounted health insurance
Even when someone is unemployed, many families have other sources of income that are considered when applying for Medicaid or health insurance discounts. For example, your application will consider unemployment income and any wages or tips from other household members.
Applications for Medicaid, CHIP and the health insurance marketplace are all based on a formula called the modified adjusted gross income (MAGI). This calculation includes the annual taxable income for your whole household including your spouse and any dependents you claim on your tax return.
Because income is based on the full year, the annual calculation will include any past wages or tips from when you were employed, and you'll also include any unemployment income you expect to receive.
Types of income that are included:
- Wages and tips
- Unemployment income
- Net self-employment income (earnings minus expenses)
- Social Security
- Social Security Disability Income (SSDI)
- Pension or retirement withdrawals from IRAs and 401(k)s
- Alimony from divorces finalized before 1/1/19
- Capital gains and investment income
- Rental income, royalties and untaxed foreign income
Types of income that are excluded:
- Supplemental Security Income (SSI)
- Qualified distributions from a Roth IRA
- Alimony from divorces finalized on or after 1/1/19
- Child support
- Veterans disability payments
- Workers' compensation
- Loan distributions
- Child tax credit payments
- Federal stimulus checks or extra benefits through Pandemic Unemployment Assistance
Frequently asked questions
Where can I get health insurance if I am unemployed?
The two best health insurance options are Medicaid (which has free or low-cost insurance) and the ACA health insurance marketplace (which offers discounted health insurance for those who qualify). With both programs, eligibility is based on income, not employment status. So you won't automatically qualify when you're unemployed, but your income will determine your eligibility and costs.
Is there free medical insurance for the unemployed?
Being unemployed does not automatically qualify you for free medical insurance. However, public programs like Medicaid and CHIP are free or low-cost insurance options for those who have a low income or no income.
How does COBRA insurance work if I quit my job?
COBRA will continue the same insurance policy you have through your employer. Any spending toward the plan's deductible will carry over to the COBRA plan after you quit. However, the amount you pay for health insurance will increase because your employer won't be contributing to the monthly cost of the plan. On average, COBRA costs $596 per month.
Can you get health insurance without a job?
Yes, there are several ways to get health insurance outside of a job including an ACA marketplace plan, Medicaid, a short-term health insurance plan, through a family member or purchasing coverage directly from an insurance company.
Methodology and sources
Data sources include:
- HealthCare.gov's Federal Poverty Level (FPL) table
- U.S. Department of Labor's HIPPA FAQs
- Centers for Medicare & Medicaid Services (CMS)'s portal for insuring children and teens
- Centers for Medicare & Medicaid Services (CMS)'s Public Use Files (PUFs)
- Medicaid.gov's information about dental coverage
- Kaiser Family Foundation's report on Medicaid expansion
- Kaiser Family Foundation's report on employer-based health insurance
- Kaiser Family Foundation's report on employer-based health insurance for two adults
Costs are based on a 40-year-old nonsmoker. The cheapest health insurance companies are calculated using CMS data for 2022 health insurance plans offered in Arizona, Georgia, Missouri, North Carolina, Ohio, Oregon, Texas and Wisconsin. Costs for short-term health insurance policies are for Phoenix.
Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.