Get the Cheapest Health Insurance When Unemployed
For most people who are unemployed, coverage through Medicaid or the Affordable Care Act (ACA) health insurance marketplace is the best choice.
- The cheapest option is often to buy discounted insurance through HealthCare.gov or your state's health insurance marketplace. The lower your income, the more you'll save on health insurance. Coverage will start the first of the month after you pick a plan.
- Medicaid is even cheaper than the ACA marketplace plans. But in many states, you're only eligible if your monthly income, including unemployment payments, is less than $1,732 for an individual or $3,588 for a family of four. It can sometimes take a few months to get coverage.
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Cost of medical insurance when you're unemployed
When you're unemployed, you usually can get health insurance for about $225 per month or less. But the cost of health insurance will depend on the type of plan you choose.
The cheapest health insurance plan for you could be Medicaid, which is free to low-cost, or a plan through the ACA marketplace, which has a variety of coverage options and discounted rates based on income.
How much does health insurance cost without a job?
Plan | Avg. monthly cost |
|---|---|
| Medicaid | $0 |
| ACA plan with subsidies | $88 |
| Short-term health insurance | $205 |
| Add on to family member's plan | $217 |
| Full price Bronze ACA plan | $462 |
| Full price Silver ACA plan | $567 |
| COBRA | $633 |
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5 best health insurance options for the unemployed
There are five methods for getting a health insurance plan if you recently lost your job.
-
Medicaid and CHIP
- Low income health insurance that's usually free.
- Good for families with children.
- Eligibility based on income and family size (not employment status).
-
ACA plans
- Coverage comes in different levels.
- Many people qualify for discounted rates.
- Can sign up when you lose health insurance or during open enrollment.
- You can't be denied coverage because of medical issues.
-
Join a family member's plan
- Coverage varies based on the plan.
- A good choice for spouses, dependents and students.
- Losing insurance automatically qualifies you for a 30-day special enrollment period.
-
Short-term health insurance
- Provides quick coverage that can start immediately
- Benefits aren't as good as traditional health insurance.
- Can sign up anytime, but medical conditions affect eligibility.
-
COBRA
- Provides the same coverage that you had through your job.
- Costs can be high.
- Automatically eligible to continue your job-based insurance after you stop working.
Will you qualify for Medicare soon? Medicare is the best medical insurance for those who are over 65 or have a qualifying disability. If you're unemployed and expect to be eligible for Medicare soon, consider buying a short-term insurance plan to fill the coverage gap.
How do you get health insurance with no job or no income?
Start by shopping on HealthCare.gov when you're unemployed and need health insurance.
This website will tell you if you qualify for programs such as Medicaid and the Children's Health Insurance Program (CHIP), or discounts on marketplace plans. Each state has different eligibility rules and sign-up processes. However, starting from HealthCare.gov will help guide you to the programs and resources that are right for you.
Medicaid and CHIP
Medicaid and CHIP are public health insurance options that offer free or low-cost health insurance for those who qualify.
Benefits include medical care, checkups, hospital care and prescription drugs. All children have dental coverage with Medicaid or CHIP. For adults with Medicaid, dental benefits vary by state.
Coverage usually begins immediately after you qualify, and most states determine eligibility in real time, so you'll know right away if you qualify.
Free health insurance for the unemployed
If you're unemployed, you could qualify for free health insurance through Medicaid. There are different eligibility requirements based on the state in which you live.
Medicaid eligibility
Medicaid eligibility is usually based on monthly income, so the sharp drop in earnings after losing a job could make you more likely to qualify.
However, unemployment income is considered when determining if you're eligible for Medicaid. With these benefits typically being about half of your paycheck when you were employed, you can get a rough idea of how your prior income could affect Medicaid eligibility when unemployed.
Also, states have different limits on how much you can earn to qualify for Medicaid. If you live in one of the 40 states with expanded Medicaid, you can qualify if you earn less than about $20,783 (about $43,056 for a family of four).
You can qualify with a higher income in Alaska and Hawaii.
Other states without expanded Medicaid have additional qualification requirements. For example, a single adult wouldn't qualify for Medicaid in Texas regardless of how little they earn.
In states without expanded Medicaid, typically only pregnant women, seniors with low incomes, people with certain disabilities and families with children are eligible for Medicaid. In addition, you typically must earn less than $15,060 ($31,200 for a family of four), which is the federal poverty level (FPL).
Below are the monthly income limits for Medicaid.
Monthly income limits with and without Medicaid expansion
Household size |
No expansion
|
Expansion
|
|---|---|---|
| 1 | $1,255 | $1,732 |
| 2 | $1,703 | $2,351 |
| 3 | $2,152 | $2,969 |
| 4 | $2,600 | $3,588 |
| 5 | $3,048 | $4,207 |
All dollar amounts have been rounded to the nearest whole number. Figures are accurate for every state except Hawaii and Alaska.
CHIP
If you need coverage for your family but earn too much to qualify for Medicaid, the Children's Health Insurance Program (CHIP) is a public insurance program that provides free or low-cost coverage for children. Depending on the state you live in, you could qualify as a family of four with an income of $51,040 per year at the low end and $124,800 per year at the high end.
CHIP income requirements can vary dramatically from state to state.
Your eligibility for CHIP is automatically determined when you apply for Medicaid or a marketplace insurance plan. And in most states, anyone up to age 19 can be eligible for coverage. Costs vary by state, but your cost won't be more than 5% of your household income. For example, if your annual income is $40,000, your child's insurance policy won't be more than $167 per month.
ACA health insurance marketplace
If you don't qualify for Medicaid, a health insurance plan through the ACA marketplace gives you the best coverage at the lowest rates.
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You can get coverage through the marketplace regardless of how much you earn. You should consider a marketplace plan if you're recently or seasonally unemployed.
You can qualify for subsidies, also called premium tax credits, if you earn less than $58,320 ($120,000 for a family of four). You can get your subsidy in the form of a monthly discount or as a tax refund at the end of the year.
Often called "Obamacare" plans, health insurance plans on the marketplace are sold by private insurance companies. Plans are grouped into Catastrophic, Bronze, Silver, Gold and Platinum tiers.
Your health insurance plan tier determines how much you pay in monthly rates versus out-of-pocket costs. For example, a Bronze plan has cheaper monthly rates but higher out-of-pocket costs when you visit the doctor or get a prescription filled. Platinum plans have the highest monthly rates and the lowest costs when you get medical care.
You can cancel your insurance at any time with a marketplace plan.
All plans have comprehensive benefits for medical care. This includes free preventive care. You can't be charged more because of a medical condition, and you also can't be denied coverage because of a preexisting condition. For children, dental and vision benefits are included, and adults can add on dental coverage.
Cost of ACA marketplace plans
With the health insurance marketplace, the cost of plans can depend on a range of factors including your age, location, household size, the level of coverage you choose and if you qualify for discounted rates because of your income.
If you're looking for middle-of-the-road medical benefits, the average cost for a Silver plan is $584 per month if you pay full price. This tier of coverage is best for most people because plans provide a balance between monthly costs and medical benefits.
For those who are young and healthy or who don't need much medical care, choosing a Bronze or Catastrophic plan could be a good way to save money. Keep in mind that you'll pay more out of pocket when you need medical care.
You should consider a Gold or Platinum plan if you have ongoing medical issues. These plans cost more each month, but you pay less for medical care.
Average monthly cost of health insurance
Plan tier | Cost |
|---|---|
| Catastrophic | $335 |
| Bronze | $462 |
| Silver | $584 |
| Gold | $641 |
| Platinum | $813 |
Based on monthly rates for a 40-year-old who is paying full price.
Discounts and ways to save
You may qualify for ACA marketplace subsidy programs if you're unemployed. Your discount is based on your estimated annual income. This may include parts of the year during which you were employed.
After filling out your marketplace application, you will automatically be informed if you qualify for subsidies.
- Premium tax credits: These subsidies reduce the monthly cost of health insurance based on your annual income. Subsidies are available for all marketplace plans except Catastrophic plans, and the amount of the monthly discount is based on your total annual income. You can typically qualify for a subsidy if you earn up to $58,320 ($120,000 for a family of four), or if a plan costs more than 8.5% of your income.
In 2023, over 91% of marketplace plans sold were subsidized.
- Cost-sharing reductions: This program will help you pay for your health insurance plan's deductible, copay and coinsurance. Cost-sharing reductions are only available for Silver plans, and you can't qualify if you earn more than $36,450 ($75,000 for a family of four). For an example of how premium tax credits work, a 40-year-old Chicago resident who makes $35,000 per year would save almost $300 per month with subsidies when shopping for a Silver health plan. That's because a normal Silver health plan for that area costs $473 per month, on average, but just $175 per month when subsidies are applied.
The final amount you would pay for a health insurance plan varies widely. But the most important thing to remember is that how much you pay for health insurance is discounted based on how much you expect to earn over the entire year.
Don't let a high sticker price shock you. Your discounts can substantially lower your final cost.
Cheapest health insurance companies
Monthly costs are based on the average cost of a private health insurance plan for a 40-year-old buying a Bronze or Expanded Bronze plan in a state that uses HealthCare.gov as its insurance marketplace.
Timing and how to get coverage
If you lost your health insurance when you lost your job, you qualify for a special enrollment period (SEP) on the ACA marketplace. This lets you sign up for an ACA insurance plan midyear. You can qualify if you lost coverage in the past 60 days or expect to lose coverage in the next 60 days.
If you miss this window, you need to wait for the fall open enrollment period to sign up for insurance on the ACA marketplace. In most states, open enrollment starts Nov. 1 and continues through Jan. 15.
Join a family member's plan
If you're unemployed, you may be able to get health insurance coverage through a parent, a spouse, a domestic partner or another family member. This can be an affordable option because typically an employer will contribute to the cost of the health insurance plan.
On average, it costs an extra $217 per month to add a second adult to an employer-sponsored health insurance plan.
Your actual costs will vary based on the plan's benefits and how much the employer contributes to the cost. Usually, if you qualify for medical coverage, you're also eligible for the associated vision or dental plans.
When can you get coverage?
You automatically get a special 30-day window to buy health insurance if you lose your workplace coverage. All employers are required by law to offer this special enrollment period.
Keep in mind that if you choose a private marketplace plan, you have a 60-day window.
When you get health insurance through work, your coverage will begin on the first of the month after you enroll.
Short-term health insurance or indemnity plan
A short-term health insurance plan can be a quick solution for getting health insurance coverage when you're unemployed or you have no income.
The affordability of short-term health insurance plans is a major advantage. Plans cost an average of $205 per month. That's cheaper than the full price of an ACA marketplace plan. However, for those who qualify for discounted rates on marketplace plans, a short-term plan will usually be more expensive.
Benefits and coverage
A short-term insurance policy's benefits are usually different from a traditional health insurance policy. That's because short-term plans don't have to offer the same level of coverage as ACA marketplace plans, so they may not cover maternity care, mental health or prescription drugs.
Plans can begin right away, so this is a quick way to get coverage. But there is usually a health screening before you can enroll, and you can be denied coverage because of your age or medical conditions such as diabetes, cancer or heart disease. And even if you're able to get a policy with a preexisting condition, short-term insurance may not cover medical treatments for that condition.
Also, most short-term insurance plans have a very high deductible, so you will have to pay for a lot of health care out of pocket before the plan starts contributing to medical care. Another option is an indemnity plan, which has a fixed benefit structure and pays a set price for certain medical treatments regardless of how much they cost. For example, if you have an MRI, the plan could pay $250 toward the cost whether the bill totals $300 or $500.
Because of these coverage issues and the variation in plans, it's important to carefully review what a plan covers before you buy one.
Top short-term insurance companies for the unemployed
- $179 per month
- $114 per month
- $158 per month
Availability and length of coverage
You can't buy short-term health insurance in 14 states and the District of Columbia. Across these locations, either the plans aren't permitted or there are no companies selling short-term plans in the state.
- California
- Colorado
- Connecticut
- Hawaii
- Maine
- Massachusetts
- Minnesota
- New Hampshire
- New Jersey
- New Mexico
- New York
- Rhode Island
- Vermont
- Washington
- Washington, D.C.
The maximum length of a policy also varies by state. The total length of coverage, including renewals, can be as short as three months in Delaware, Oregon and Maryland. Wisconsin allows coverage for up to a year and a half, and states including Louisiana, Florida, Georgia and Kentucky allow coverage for up to 36 months.
COBRA health insurance
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COBRA, short for the Consolidated Omnibus Budget Reconciliation Act, is a program that lets you continue the health insurance you had through a job even after you stop working.
With COBRA, you can keep the same coverage you had while working, but your monthly costs will increase significantly.
The change in costs is because you'll be paying the full price of the plan rather than splitting the costs with your employer. For example, an average worker pays $1,637 per year for health insurance, and their workplace covers the remaining $5,953. If that worker goes on COBRA, they will now have to pay the full $7,590 per year.
COBRA insurance costs $633 per month, based on the average costs of employer-sponsored health insurance plans.
When should you use COBRA?
It's usually not a good idea to go on COBRA because of its high costs. But it may be worthwhile in some circumstances.
- As a temporary stopgap before you switch to a more affordable policy.
- If you're already getting medical care and you've met your plan's deductible.
Household coverage and plan types
Children and dependents can also get health insurance coverage through COBRA. You can also use COBRA to continue dental or vision insurance. However, sometimes you can get a better deal by shopping around for a stand-alone dental insurance policy.
Timing of coverage
You'll usually have 60 days to sign up for COBRA after losing coverage through an employer. And typically, you can keep COBRA for at least 18 months. There are no contracts, and you can cancel at any time.
For those considering both COBRA and a marketplace plan, the 60-day cutoff is important. During the first 60 days, both COBRA and the marketplace are available options. After 60 days, neither one will be an option, and you will have to wait until the fall open enrollment period to sign up for a marketplace plan.
After losing coverage | COBRA | Marketplace |
|---|---|---|
| First 60 days | Yes | Yes |
| After 60 days | No | No |
Getting marketplace coverage after COBRA
In most cases, losing health insurance coverage allows you to sign up for a marketplace health insurance plan any time of the year. But there are certain rules you have to follow when you leave COBRA.
How COBRA ends | Marketplace eligibility |
|---|---|
| Coverage runs out | Special enrollment period |
| You end COBRA early | Wait for open enrollment |
| You end COBRA on Jan. 1 | Sign up during open enrollment |
What's considered income when applying for Medicaid or discounted insurance
You may still have an income even if you're unemployed. For example, some unemployment benefits may be counted as income when applying for free or discounted health insurance. Also, household income from a spouse or family member may factor into your eligibility for Medicaid or ACA marketplace subsidies.
Applications for Medicaid, CHIP and the health insurance marketplace are based on what your whole household earns. Eligibility for Medicaid and discounted insurance is typically based on your modified adjusted gross income (MAGI), with some exceptions. For health insurance purposes, MAGI is typically your adjusted gross income (AGI) plus untaxed foreign income, nontaxable Social Security benefits and tax-exempt interest, if applicable. For most enrollees, AGI and MAGI will be the same or very similar.
Because income is based on the full year, the annual calculation will include any past wages or tips from when you were employed, and you'll also include any unemployment income you expect to get.
Included income
- Wages and tips
- Unemployment income
- Self-employment income (earnings minus costs)
- Social Security
- Social Security Disability Insurance (SSDI)
- Pension or retirement withdrawals from IRAs and 401(k)s
- Alimony from divorces finalized before 1/1/19
- Capital gains and investment income
- Rental income, royalties and untaxed foreign income
Excluded income
- Supplemental Security Income (SSI)
- Qualified distributions from a Roth IRA
- Alimony from divorces finalized on or after 1/1/19
- Child support
- Veterans disability payments
- Workers' compensation
- Loan distributions
- Child tax credit payments
Frequently asked questions
Where can I get health insurance if I am unemployed?
The best health insurance if you're unemployed is Medicaid, a type of free or low-cost government insurance. If you don't qualify for Medicaid, consider a plan through the ACA health insurance marketplace since you may be eligible for government subsidies that can significantly lower your monthly rate.
Is there free medical insurance for the unemployed?
Being unemployed does not automatically qualify you for free medical insurance. But you might qualify for Medicaid, which is a free or low-cost medical insurance program, if your annual income is about $20,783 or less ($43,056 for a family of four).
How does COBRA insurance work if I quit my job?
COBRA will continue the same insurance policy you have through your employer. Before signing up for COBRA, it's important to remember that your health insurance costs will increase significantly since your ex-employer will no longer pay for part of your monthly costs.
Can you get health insurance without a job?
Yes, there are several ways to get health insurance outside of a job, including an ACA marketplace plan, Medicaid, a short-term health insurance plan or through a family member.
Methodology and sources
Data sources include:
- U.S. Department of Health and Human Services federal poverty level (FPL) table
- U.S. Department of Labor HIPAA FAQs
- Centers for Medicare & Medicaid Services (CMS) portal for insuring children and teens
- Centers for Medicare & Medicaid Services (CMS) public use files (PUFs)
- Medicaid.gov information about dental coverage
- KFF report on Medicaid expansion
- KFF report on employer-based health insurance
- KFF report on employer-based health insurance for two adults
- KFF report on Average Advanced Premium Tax Credit (APTC)
Costs are based on a 40-year-old nonsmoker. The cheapest health insurance companies are based on 2024 health insurance plans offered in the 32 states that use HealthCare.gov as their health insurance marketplace.
Editorial note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.