This story has been updated. 

By Crystal Jarvis, contributor 

Greater Decatur, GA — Millions of families who are losing their health insurance amid the economic downturn may find that their alternative options are limited, especially if they have pre-existing medical conditions.

North Decatur residents Jessica Howell-Edwards and Christopher Edwards — who was furloughed from his job in late March — will be booted off their health insurance soon. The family is paying for it until the policy is canceled on July 1. With two children who were diagnosed with severe allergies right before the COVID-19 outbreak and other pressing healthcare needs within their family of six, the Edwards are afraid that they won’t find affordable health insurance that will compare to the quality health insurance that they will soon lose.

“What are we supposed to do?” Jessica Howell-Edwards said. “The marketplace said we may qualify for reduced-cost coverage. We then applied for Medicaid. We have yet to receive a response from either application.”

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Across the country, more than 78 million people lived within families in which someone lost their job between March and May of this year, according to the Kaiser Family Foundation Report. Among those families, at least 61 percent, or 47.5 million, were covered by employer-sponsored health insurance.

Particularly in Georgia — which is one of the eight states that account for nearly 50 percent of all people across the nation who lost or will lose their employer-sponsored health insurance coverage — local insurance brokers are seeing an uptick in inquiries from people trying to find alternative health insurance options, said Health Insurance Broker Brian Boss, who is the owner of Atlanta-based BPB Associates.

Dekalb County residents with pre-existing conditions have three insurers to choose from on the Affordable Care Act (ACA) marketplace exchange: Ambetter from Peach State Health Plan, Kaiser Permanente, and Anthem Blue Cross Blue Shield of Georgia.

Also, there are fewer brokers in the market to assist with purchasing marketplace insurance.

“As the years have gone on, fewer and fewer brokers have stayed with Obamacare,” Boss said. “I’m one of the few that’s left. Most of the brokers have left this market because they get paid so little commission. I’ve been quite busy with a lot of activity. I get several calls every day.”

Bob Smith, an independent health and life insurance advisor based in Tucker, Ga., said he has been helping families navigate the health insurance market amid the pandemic.

“Some individuals are willing to go without health insurance and accept the risks associated with the decision, saying what is insurance but risks. And others are reaching out to agents like myself and saying, ‘I need to protect myself,’ because as we know, the time to get insurance is before you need it,” Smith said. “It’s like auto insurance. You can’t have an accident on I-285 and then call an insurance company and say, ‘hey I need auto insurance.’”

From the COBRA plans to ACA and short-term indemnity plans, there can be a lot of information to unpack before settling upon the right decision. Here are some options.

COBRA

Consolidated Omnibus Budget Reconciliation Act (COBRA) insurance can be available if someone lost their employer-sponsored health insurance due to being laid off or terminated. The same insurance coverage could continue under federal law. The downside of COBRA is that it’s known to be expensive. The total cost of insurance under COBRA can increase by 102 percent, depending upon how much the employer contributed to the original plan. Families will not only have to pay their portion—but they will be on the hook for the other 50 percent that was previously split with the employer. The additional two percent includes an administration service charge.

Here is an example of the payment increase: While the Edwards family spent a whopping $3,000 in premium payments for the past three months from March thru June 30, to hold on to their employer-sponsored insurance plan — their premium payments would jump to about $3,000 per month via a COBRA plan.

ACA Marketplace

The ACA marketplace offers Health Maintenance Organization (HMO) insurance plans within the regulated marketplace exchange. Families can qualify for ACA subsidies based on their income which is offered on a sliding scale. “One person making $12,760 would get it almost for free,” Smith said. “That same person not qualifying for a subsidy, and depending on their age, may need to pay hundreds of dollars.” Here in Georgia, the open enrollment period has ended, which means you will have to enroll under a qualifying event within 60 days of the event, which does include “loss of other coverage.”

Individual Plans

Short-Term Insurance Plans are another potential health insurance option for families who lose their health insurance coverage. These plans usually carry lower premiums than COBRA and ACA-regulated plans, and they can be customized based on the type of coverage desired.

Families can choose lower premiums and higher deductibles and they can also choose unlimited doctors’ visits or a certain amount of visits based on their healthcare needs. Here’s the downside: People with pre-existing conditions will not be approved for such plans. Plus, insurers of short-term plans will often challenge benefit claims if they believe it is a result of a pre-existing condition. There are clauses written within the plan known as the “Prudent person language,” said Laura Delavan, partner of Sterling Seacrest Partners in Atlanta, which provides insurance, surety and risk management services to businesses and companies.

“Let’s say you have a condition that you don’t know about,” she said. “Then, you go get this plan, but you don’t know you have a pre-existing condition because you haven’t been diagnosed. Well, the language in the policy says you did have this condition and a prudent person would have gone to seek medical care.”

Before buying any plan, Smith suggests reading the fine print and shopping around by speaking to at least two insurance agents.

“It’s important to have trust in an agent and their level of experience. This generally begins with a phone conversation and the agent’s degree of follow-up and follow thru,” he said. “Some agents charge a fee for what they do. In the case of health insurance, free doesn’t mean you’re getting a bad product. People sometimes think the more they pay the better the product.”

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Amid this sluggish economic climate, companies are “being squeezed,” and have implemented hiring freezes to cut costs and bolster their finances, said Thomas Smith, an Associate Professor in the Practice of Finance at Emory University’s Goizueta Business School.

“A lot of companies are trying to figure out how to keep operating,” he said. “When the economy goes sideways people will have a hard time making ends meet.”

One of the ways companies are cutting costs is by cutting back on paying insurance premiums for their employees while profit generation is at a standstill, which is exactly what happened to the Edwards family.

Christopher Edwards, who provides the sole income for his family of six as a Technical Product Manager, was furloughed three months ago. With 4-year-old twins, a 7-year-old and 12-year-old, the couple wrestled with the idea of slashing their bi-weekly insurance premium payments from their hard-hit budget to save money.

However, the global coronavirus pandemic that has now claimed nearly 108,000 lives in the U.S., made them think twice.

Jessica Howell-Edwards said, “My husband asked me, ‘Are you sure you want to keep paying this premium because they can’t even go to the doctor?’ Then I said, ‘But what if one of us gets COVID?’”

Then came the devastating email from his company’s Human Resources Department, informing them that they would lose their health insurance.

“The company said they were canceling our insurance policies to meet their business goals,” Jessica Howell-Edwards said. “At the end of the day, we’re all people and I know they have to meet their goals but treating us like we are just a piece of their business puzzle is really hard to swallow during this time.”

Crystal Jarvis specializes in writing feature articles about the job market and career advancement. She is the owner of Splash of Color Creative Solutions, which creates marketing campaigns for small businesses and creates job-winning resumes and cover letters for professionals. Have a question about the job market? Visit splashofcolorcreativesolutions.com or contact her at [email protected].

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