Finding Private Health Insurance When You’re Unemployed

This economy is rough, no doubt about it. Lots of people are suddenly finding themselves laid off, unemployed, and without the group health insurance benefits they had come to rely on. The transition out of the active job market can be rough, and the last thing most people want to think about is finding new private health insurance (not to mention private health insurance that is also affordable health insurance)! Unfortunately, that’s one of the first and most important things you’ll have to worry about.

The first thing to do is to figure out if COBRA health insurance is right for you. Since we’ve discussed how to do that at length in another article, there’s no need to repeat the entire topic here. If you’ve read that article and determined that you need to look for affordable health insurance on your own, then read on.

You’re probably used to group health insurance, but now you’re looking for private health insurance – and those are two very different animals. There are a few key differences between the two types of insurance that you’re going to want to be aware of:

A private health insurance policy with the same benefits as a group policy will be more expensive than that group coverage. This is unfortunate, but it is a reality of private health insurance. This isn’t to say that private health insurance can’t be affordable, but you should be ready to either pay a little more for the same coverage or investigate a somewhat higher deductible.

Group insurance is, by law, required to provide certain maternity benefits. Private health insurance is not bound by that same requirement, so maternity benefits aren’t automatically included. Check out our article on how maternity benefits work in the private market for more details.
If you have any pre-existing medical conditions (you’ve had cancer or open heart surgery in the past, currently have Crohn’s disease, currently have diabetes, etc.), your options for private health insurance are going to be severely limited. In this case, COBRA is probably your best option.

If COBRA isn’t right for you, then your next step is to think about how long you’re likely to be unemployed. If your prospects for employment look good and you think you might be back in the workforce in six months or so, then a short-term health insurance policy might be right for you.

However, if you think it’s going to take more than six months to get back into the workforce, or if you are considering taking advantage of your newfound unemployment to explore the possibility of becoming self-employed, then a normal full-term private health insurance policy will be your better option.

The sudden loss of income that comes with unemployment means that finding an affordable health insurance plan is important to your budget. However, it’s very, very important to remember the following: an affordable health insurance plan can still provide comprehensive benefits. There are cheap health plans that offer limited benefits, leaving gaping holes in your coverage – avoid these at all costs! Remember, that plan that seems too good to be true probably is – the ten bucks a month you can save on your premiums by buying a limited benefit plan will quickly be wiped out when you find out you need surgery or major medical treatment that your limited benefit plan won’t cover.

Now, you’ve learned about the difference between private health insurance and group health insurance, you’ve seen how to determine if COBRA, short-term medical, or full-term health insurance is the best choice for you, and you know that you need to make sure to buy a comprehensive health insurance plan instead of a limited-benefit policy. There’s only one more thing you need to know before you start looking for your new private health insurance plan:


When you find yourself suddenly unemployed, you’re working against the clock. If you immediately purchase private health insurance, so long as you don’t have any pre-existing conditions, your new insurance company will see that you just got off of a group plan and won’t have any trouble issuing you a policy. That’s because they know that if one insurance company had you as a client, then you’re probably okay to be a client of theirs, too. However, if you wait too long (about three weeks) to purchase a private health insurance policy, you’ll have what’s known as a “gap in coverage.” When you go that long without health insurance and then go to buy a new private policy, your new insurance company will generally make you pick a policy effective date 30-45 days from the date of your application. That way, they’ll have time to review your medical records and make sure that you’re an “acceptable risk” – a process that can be avoided entirely by not having a gap in coverage in the first place.

Now that you know the most important points about moving from a group to a private health insurance policy, the last step is to contact an independent insurance agent and work with them to find the best policy for your needs. Let that agent know that you’re newly unemployed and that finding an affordable health insurance policy is important to you, but that you don’t want a limited benefit policy. Since independent agents represent many health insurance companies, you’ll have a lot of options open to you. Your agent will know the best ways to narrow them down and help you find the policy that’s right for you!

I know that finding private health insurance when you’re unemployed is a hard thing to think about. It’s easy to feel like everything is piling up on top of you, and it can get a little overwhelming. However, I’m really glad that you’ve taken the time to read this post and learn more about how to protect your family’s health no matter what. The last step is to get your free health insurance quote so that you can find a plan that will protect you, your family, and your bank account. Don’t worry – I’ve been in your situation before, too, and I’ve already learned from my mistakes. But you can protect your family, even when the economy is down – and I can help!

Previous Post

Getting Affordable Health Insurance

Next Post

Is COBRA Health Insurance Right For You?

Leave a Reply

Your email address will not be published. Required fields are marked *