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Health Insurance Without a Job (Your Choices + What We Did)

Looking for health insurance without a job? It can be tricky to find an affordable plan. Here's what we did when my husband lost his job.

While I don’t wish to discount the entire month of November several years ago when we were unemployed — aside from a ton of paperwork, it was a pretty nice month — I can say that in the back of my mind there was a ticking time bomb counting down to November 30th (aka the day we were losing our health insurance).

woman on floor with calculator, text overlay

With my husband, Paul, being unemployed, and me being self-employed, there was no employer-sponsored health plan for us to fall back on. Add in the craze and confusion of “Obamacare”, and you can see why November 30th was a bit of a sore spot in our household.

It also did not help that Paul’s company waited 21 days to send out our COBRA information.

Of course, the delay did not end up mattering because the amount we would have had to pay to continue our coverage with them was an astounding $1,837.82 per month for our family health insurance plan ($1,765.85 for medical and $71.97 for dental coverage).


(UPDATE: When my husband decided to leave his next job to take another position in 2019, we were offered COBRA again. Guess how much? For our family (two adults, one child), it would cost $2,144.04/month! Egads! I'd like to find the people who can actually afford to get COBRA.)

I had envisioned it costing a staggering $800 per month, so this number had me laughing in hysterics…as well as rushing to the phone to find an alternative.

Before we get into what we did in our personal situation for health insurance with no job, let's discuss a few things you need to know about health insurance while unemployed.

How Do I Get Health Insurance if I Lose My Job? No-Job Health Insurance Options

There are three ways to get health insurance if you lose your job. One is to purchase a marketplace plan through the Affordable Care Act (which you can do through USAA, even if you have no military affiliation whatesoever, just like we did!).

Another option is to use COBRA.

How much is COBRA insurance? That depends on your employer's medical insurance plan — they'll send you a letter in the mail with your cost (hint: it's going to be quite expensive. Ours was around $1,800/month for two people, though that included dental insurance and vision insurance!).

You might think, “I can't afford cobra what do I do?” That's because COBRA is going to be hugely expensive, and you might feel like you can't even afford a marketplace plan. You'll be relieved to know that you may qualify for Medicaid or another free/low-cost health insurance plan.

Your third option could be low-cost health insurance plans (cheap health insurance). Since free or low-cost health insurance options like Medicaid or the Children’s Health Insurance Program (CHIP) are available based on your income, household size, age, etc., you might qualify for these options while unemployed.

Psst: learn more about how to survive unemployment here. And also, here's how to get cheaper prescriptions.

Will I be Penalized for Not Having Health Insurance if I Am Unemployed?

There is no specific penalty exemption for not having health insurance just because you're unemployed. So yes, you can and likely would be penalized. However, there are income limits to the health insurance penalty, and you might qualify for those since you're unemployed and likely making less income.

Hint: starting with the 2019 plan year, there are no longer any penalties for not having health insurance, so you no longer need to worry about this. 

When Does Health Insurance Start at a New Job?

Something you'll be happy to know is if you start a new job but the health coverage doesn't kick in for 30, 60, 90, or however many days, you can still purchase a marketplace health insurance plan for your health insurance gap between jobs (when you lost coverage with your old employer and when your new employer's plan starts).

That really helps with a 30 day waiting period for health insurance from your new employer!

Then, when your new job's health insurance plan starts, you can quit the health insurance exchange plan at no penalty.

How Long do You Have Health Insurance after Quitting your Job?

In general (and in my experience), you have your health insurance until the end of the calendar month in which you either quit or you get laid off. But this isn't always the case — some plans end coverage on your last day of employment. So, you'll want to check in on this (hint: if you don't want to alert others that you're thinking about quitting, then ask someone who quit who used to work with you — when did their coverage end?).

Pro Tip: Because many plans will cover you through to the end of the month in which you quit, if you're choosing to quit your job, then you want to quit early in the month. This will give you the longest time possible to find another suitable health insurance plan. If you find out that your plan will end the day of your last employment, then you'll want to quit later in the month since a marketplace health insurance plan won't start until the first calendar day of the next month.

Pssst: are you thinking about quitting your job? I've got a really cool resource for you that details how to engineer your layoff instead. This could be a game-changer, and allow you to negotiate a life-changing severance package!

Which leads into the next question you might have…

Can I Get Health Insurance if I Quit My Job? How to Buy Health Insurance without a Job


Thankfully, if you leave your job for any reason, you are eligible to purchase health insurance on the marketplace during the Special Enrollment Period (meaning you don't have to wait until the normal enrollment period). And coverage will start on the first day of the month after losing your health insurance.

For example, if you quit your job or lose your job on March 24th, and you buy a health insurance plan on the marketplace, then your health insurance coverage will start on April 1st.

You typically have 60 days to sign up for coverage under this “special enrollment period” triggered by losing or quitting your job.

Your two choices for health insurance policies will either be to sign up for a marketplace plan (which you can do through USAA, even if you have no military affiliation whatesoever, just like we did!), or you can use COBRA (yes, even if you were the one who quit).

You'll learn below from our experience, COBRA insurance costs is hugely expensive. That's because you're covering the entire cost of your insurance coverage – both your cost, and your employer's cost, plus an administrative fee. Fortunately, if you opted for COBRA at first but you can't sustain the payments (or want something more cost-effective), you may be able to switch from COBRA to a marketplace plan.

Going with USAA and a PPO Major Medical Plan + a Bonus

Now let's go into what my own husband and I did for health insurance coverage when he was unemployed.

Once again, my husband’s military benefits helped us out. I was able to call USAA and talk with a healthcare specialist. He was extremely knowledgeable not only of his own plans, but of the Healthcare Insurance Marketplace (he was even able to estimate the cost of what we would pay on the exchange to see if we would receive a subsidy and if we wanted to do that instead of use USAA. See below.).

Psst: here's my full USAA health insurance plan review, and how to get a quote.

We were in a good place when this occurred several years ago because the free preventative care portion of the Affordable Healthcare Act was already in effect. Before that, usually with a Major Medical Plan, preventative doctor visits were not covered. But because of the new laws, we were still about to get preventative care medical costs included with our policy (such as a well woman visit).

These are generally the types of appointments we have throughout the year anyway (knock on wood), so that worked well for us.

Here are some specifics of our health insurance plan without a job:

  • Cost: Our cost for the plan was just $193.80 per month for both of us.
  • Deductibles: There was a $5,000 per person deductible, with an annual maximum of $10,000/per person out of our pockets for participating providers.
  • Plan Payout Cap: There was no cap on the amount the insurance company will pay out.
  • Doctor Appointments/Prescriptions/Co-Pays: There were no copays with this plan. However, the coinsurance for doctor visits and prescriptions was 50%.
  • Referrals: Written/verbal approval to see a specialist was not required for this plan.

We were allowed to keep the plan until December 2014, at which point we had to switch to a plan that met all of the requirements under the new Affordable Healthcare Act (we signed up for the plan right before this act went into place).

Pre-Existing Conditions

Pre-Existing Conditions were no longer a factor in healthcare plans as of January 1, 2014. But because we signed up for a health plan before the very first open enrollment period under the Affordable Healthcare Act, we had to submit our Certificate of Creditable Coverage from our previous health insurance plan to show that our health insurance had not lapsed.

This gave us some protections against pre-existing condition limitations that were still in effect. Check this article out for more information.

Our Estimated Cost on the Health Exchange Marketplace

We were fortunate in that we did not have to attempt to log onto the new Health Insurance Marketplace website. This is because the insurance rep at USAA was able to estimate what we would pay on the exchange, and to answer any and all questions we had about whether or not USAA or a plan on the Marketplace would be better for us.

On the Marketplace, a plan would cost $508 per month for the two of us. Because of our current income, we would receive a $200 per month subsidy, so the total cost would be $308 per month.

Have you attempted to find a plan on the new Health Insurance Marketplace? How did it go?

Catch-Up On My Documented Self-Employment Journey (spoiler alert: there's a layoff, a few tears, lessons learned, financial changes, and all sorts of goodies that occurred after I pulled the plug on my 9-5):

I Have Chosen to Chance the Rapids: Taking My Writing Full-Time>>
Blogging and Writing Full-Time: Financial Changes to Come>>
Blogging and Writing Full-Time: One Month Update>>
Self-Employment Update: Six Months After Taking that Leap>>
Contingency Plan “Husband-Lost-His-Job” is in Full Swing>>
Update on the Unemployment Situation in Our Household>>
How We're Handling Health Insurance in Unemployment>>
Surviving {and Thriving} In My First Year of Self-Employment>>
What We Did to Financially Survive 5 Months of Unemployment + a Free Gift for You>>
Behind-the-Scenes of Frugal Confessions' Second Year in Business>>

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.