How to Bridge a Gap in Health Insurance

Whether it’s due to a layoff or striking out on your own, losing your employer-sponsored health insurance is scary but not uncommon. In 2022, 11% of people experienced a gap in health insurance. Luckily, there are options to protect your health and mitigate your risk. The best option for you will depend on your budget and—most importantly—your health. 

COBRA

  • Best for: People receiving frequent medical care or at risk of needing care

  • Estimated Cost (individual): Typically $400–$700 per month, but it depends on your current policy

  • Length of coverage: 18 months

  • Top Pro: Consistent coverage you’re familiar with

  • Top Con: High monthly premium

COBRA allows you to keep your current healthcare policy for 18 months after losing benefits from your employer. However, you have to pay for the entire premium yourself, which typically runs between $400–$700 per month depending on your plan. For many people, the cost of COBRA is prohibitively expensive, but if you have ongoing medical treatment and regularly see your medical providers, COBRA is the best option for ensuring uninterrupted coverage and a seamless continuation of your care. You can keep all of your current doctors and coverage benefits. The only thing you’ll need to adjust is your budget. You have 60 days to enroll once your employer notifies you about your COBRA benefits and another 45 days from enrollment to pay your initial premium.

Short-Term Health Insurance

  • Best for: The young and healthy

  • Estimated Cost (individual): $100–$300 per month

  • Length of coverage: Up to three years (varies by state)

  • Top Pro: Low monthly premiums

  • Top Con: Less comprehensive coverage

Short-term health insurance policies are intended to fill a temporary gap in healthcare coverage.  It’s best to think of them as a disaster policy that will limit the damage to your wallet in case of a medical emergency. Short-term health insurance plans do not cover pre-existing conditions and don’t usually provide much in the way of preventive care coverage. If you are considering going without health insurance altogether due to the cost or complexity of signing up, this is a better alternative. 

One of the benefits of short-term health insurance is the ease of signing up. There is no limited enrollment period, so you can sign up for short-term insurance at any time. You can customize the limits of your policy to best suit your specific needs. The monthly premium can be as low as about $100 per month depending on your age, location, and coverage selection.

State or Federal Healthcare Exchange

  • Best for: Lower-income people who need to access healthcare

  • Estimated Cost (individual): $365–$1,000 (can be lower with subsidies)

  • Length of coverage: Renewed annually

  • Top Pro: Can receive subsidies to make the coverage more affordable

  • Top Con: Your current providers may or may not be in-network

Depending on your income, you may find an affordable healthcare option through your state/federal marketplace. Visit this site to determine whether you can search for plans on HealthCare.gov or if your state has its own healthcare exchange. During the application process, you’ll be prompted to enter your expected income. Your eligibility for subsidies will be based on this information.

You can enroll during the annual open enrollment period that starts November 1st of each year.

You can also enroll outside of the regular open enrollment period if you have certain life changes (losing employer-sponsored health coverage when losing your job or quitting, having a baby, getting a divorce, etc.) but you must enroll/make changes within 60 days of the life event.

There are four different tiers of policies: bronze, silver, gold, and platinum. The bronze plans have the lowest monthly cost but the highest deductibles and the platinum plans have the highest monthly costs but the lowest out-of-pocket expenses. Depending on where you live, you may have multiple options for insurance providers. Before selecting a plan, you should understand how much your regular medical care costs under that plan (including doctor’s visits and medication) and find out whether your current healthcare providers accept that insurance.

Not sure how covering a gap in insurance affects your budget?

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