Yahoo Finance

This week on wealth, we're walking you through the financial impacts if you quit your job or are unexpectedly laid off. And today we're focusing on healthcare. If you lose your health insurance through your employer, you have a few options for staying covered: COBRA, a marketplace health plan, Medicaid, and the Children's Health Insurance Program known as CHIP. Yahoo Finance senior reporter, Angelica Moni, is here to break down all of these options. So let's just start, Ange, with COBRA. How does that work and what are the pros and cons?

Yeah. So COBRA was one of the ones that came through congressional action a few decades ago and it basically is requiring your employer to continue offering, or sort of keep you in, the plan that you already are in. That can go through about 18 months at minimum, and can also extend beyond that. But the one thing that you have to keep in mind is that for that one, you have to pay the premium yourself. That's the one thing that changes about it, so it becomes a little bit more expensive to keep on hand. So let's do the pros and cons of that. So pros are, you are keeping everything in place for yourself. The doctors that you're used to, the network that you're used to, coverage as is, um, if you've already started to pay out, right, through your, uh, get coverage, your deductibles in place, your out-of-pocket is in place. So you can continue paying towards that through the year. It also prevents the gap in coverage for tax purposes, as well as generally for your health. It also applies to your spouse or children, and in reverse, this is also true. If your spouse has a job, you can, through a special enrollment, get coverage through their workplace if you find yourself without coverage of your own. So that that's one of the key pros. Now, cons. Like I mentioned, you're going to be paying the premium yourself now that can be up to 102%. And that's because when you are in an employer plan, they are paying part of the premium for you. So it gets more expensive, does not apply to all of the employer-sponsored plans, so it just depends. And, of course, this is just a temporary fix, and you can lose coverage if you pay late. So that's a key point to remember.

Now, what about a marketplace health plan? How do those works, and and what are some of the pros and cons of that?

Yeah. Marketplace is a little bit better because it is more control over the situation. But let's just go through how you get on that. If you find yourself losing your job, you can look at marketplace instead of COBRA, it or if you're in a situation where that's not an option, and you have about 60 days to enroll in that. It is called a special enrollment period, because it is just any of the days that is outside what the normal enrollment period for marketplaces, which is November 1st through January 5th. All the rest of the days is a special enrollment period for any life qualifying reasons. Coverage can start the first day of the next month, so you can get on board pretty quickly. Now, the pros of these plans is that, like I mentioned, it's affordable, so you have the monthly premiums. You can get that subsidized depending on your income, so that also helps. You can also get certain savings because of the special event, qualifying special event, in your life. The coverage is generally going to be good. You can generally get, if you're localized, that same network that you're in, your same doctor, if you see someone or if your healthcare services are in the general vicinity that you live. It also is good because we know that the ACA covered pre-existing conditions, so whatever you do have doesn't disqualify you. Now, the bad part. Because of that coverage, the limited networks, if you do see someone who is outside of your general living vicinity or you know, work environment, that could lead to you losing access to your doctors. That's something to watch out for. The high out-of-pocket costs because these plans generally tend to be high-deductible plans. And so you lose the any payments you've made towards plans with your deductible and out-of-pocket on top of getting a higher threshold to surpass for the year before 100% kicks in. Also, you have those strict deadlines. So those are sort of the pros and cons of both.

You covered the two main options. With the 30 seconds we have left, what are some of the alternatives that we have?

You mentioned Medicaid and CHIP. That is just good to know that each state does work through those differently, so you'd have to check, based on local rules, how and whether or not you do qualify. But those are obviously a little bit more income based. So if you are in that income level, that's another option to take a look at.

Angelica, thanks so much.

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