Via @AP: Pennsylvania’s Department of Labor and Industry said unemployment compensation claims were 50,000 on Monday, and Tuesday’s filings were on course to exceed that. In the entire first week of March, the state received barely 12,000 claims, according to federal data.
— Marc Levy (@timelywriter) March 17, 2020
Pennsylvania is not unique. Ohio is having a similar spike in claims. Every state that is shutting down this week will have a similar spike. The states that have not shut down this week will have a spike next week when they shut down. And then there is another wave of secondary lay-offs coming as firms that have a little bit of work available for their current work force run out of work and cash stockpiles in the next couple of weeks.
When one is laid off, there are five major insurance possibilities:
- Go uninsured
- Attempt to qualify for Medicaid or CHIP as appropriate
- Go on Exchange
- Go underwritten
- Continue COBRA
I strongly recommend against going uninsured during a pandemic. Medicaid will have the lowest premium and lowest cost sharing if you qualify. Income qualified Medicaid looks at monthly income. So if you had a job that paid really nicely in January and February, and not a lot of income in April, you can qualify on your April income. This is especially important in the states that have expanded Medicaid due to the ACA (Minnesota and New York Residents, you will also look at the Basic Health Program).
ACA exchange coverage is available as a special enrollment period due to loss of insurance through work. Income qualification is based on estimated annual income. Estimate something reasonable (however what the hell is “reasonable” is one hell of a good question right now) but make sure you estimate over 100% FPL if you live in a non-expansion state. If you are mainly worried about getting hit by a bus or covering ICU stays, the cheapest plan with a network that you like may be a good choice. Your out of pocket expenses start over again at zero.
Underwritten coverage can be a decent choice at a lower premium if you can pass the underwriting, can read the fine print AND are unlikely to get ACA subsidies. Just be careful and stick with products that are actually regulated by the state insurance commissioner. Avoid plans that are explicitly “NOT INSURANCE!”
Finally, COBRA is tough. You pay full premium but if you have already spent a lot of out of pocket expenses already, those carry over. The quick rule of thumb is that COBRA will be look better relative to the Exchange the older you are if you do not qualify for subsidies. Once subsides are thrown into the mix, there are a few situations where COBRA will be better, but I would bet on the Exchanges being attractive more often than not.
Good luck and as you have questions, e-mail me or let’s hash them out in comments.
Thanks for this excellent roundup!
Meanwhile, Wisconsin is still telling people temporarily laid off because of covid shutdowns that they have to attend unemployment training sessions to qualify for assistance.
Because of course they are.
@PenAndKey: I work for PA’s Unemplpyment system. One of the first things we did was to suspend attendance at those classes.
Also, the offices that provide those classes, called Careerlink offices, were full of people on Monday. Lots of workers in seasonal jobs who would have been going back to work stayed on layoff status.
Some needed to reopen claims that were suspended, other people who aren’t computer literate needed help to open claims.
Of course, now the state is shut down, except for essential employees.
What a nightmare all of this is.
Maybe the stimulus can duplicate what was done in 2008. The Feds paid 2/3 of Cobra premiums. I forget the duration, but it helped get me through my 9 months of unemployment at the time. The system should be documented somewhere unless Trump burned the paperwork.
Someone at the WI offices should get the memo. They actually have a Coronavirus FAQ up on their website and it explicitly states that if you don’t attend the classes you cannot collect. Of all the boneheaded moves to make, it shouldn’t surprise me that my state is doing that one. As some of you are probably aware my wife’s store announced their closing their doors on Thursday. Yesterday I was in a bit of a panic, and while it turns out it won’t affect my wife as much as I thought because she has enough Purchase Order work to keep busy at home for a few weeks before she’s due to deliver, the same can’t be said for the clerks. Or all of the restaurants and bars that announced they’re closing the doors in the area & state. If any of those displaced workers seek assistance they’re going to be doing so at the risk of their own health.
If you go COBRA for a while, as I did last year, be very careful at the end of it to pick up both parts B and D of Medicare within the 60-day window. Otherwise you pay a monthly penalty on your premiums for the rest of your life.
I knew about the rest-of-your-life penalties for not picking up B, but had not realized that they applied to D, and only just barely qualified, by accident, when I enrolled in a Medicare Advantage plan that covered medications.
I could use advice please.
Colorado resident, 55 yrs old, male, good health, past (successful) cancer treatment.
Self-employed, annual income around 125k, so no subsidies. All work cancelled now, don’t know when income will resume.
Did not use my insurance in 2018, premiums went up a lot in 2019 so I didn’t renew and went ‘naked.’ Same this year.
Not feeling especially panicked, I have savings, but I guess until reading this post I just assumed there are no real insurance options for me at this point in the year and with my medical history. Now I’m wondering if maybe I do have options?
Thanks in advance David for any thoughts and for doing this generally here when I know you are busy.