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In the United States, health care coverage can quickly change when life circumstances change. These shifts can lead to coverage loss, movement between programs, or gaps in coverage.
Coverage can shift or be lost by leaving a job, relocating, getting married or divorced, losing a partner or spouse, enlisting in the military, getting older, an increase or decrease in income, or bringing a baby into the home. For example, after age 26, children can no longer remain on a parent’s private insurance plan.
Because of how the U.S. health care system works, people can also easily lose coverage due to missed notices or paperwork, complicated rules, policy or eligibility changes, or a plan no longer being available. When coverage changes, it increases the risk of gaps in coverage.
Even short gaps in coverage can mean not being able to get necessary medical care, huge medical bills, worse health outcomes, emotional stress, major money problems, or any combination of these.
Common Causes of Coverage Loss
Loss of Employer-Sponsored Coverage
Someone may lose their employer-sponsored coverage with a reduction in hours, switching to contract work, or losing their job altogether.
If they resign or are let go from their position, COBRA may be available. COBRA allows a person to keep the same employer-sponsored plan for a limited time, typically 18 months or less.
However, with COBRA, the now ex-employee is responsible for the full cost of the premium. Since the employer is no longer paying any portion of the premium, the premium cost to the former employee is usually much higher than it was before.
COBRA can provide short-term protection, but the price can make it difficult to maintain coverage.
Loss of Marketplace Coverage
Marketplace coverage can be lost if premiums are not paid or if renewal steps are missed.
It may become too expensive, especially if income or policy changes reduce discount savings. Premium tax credits, also known as premium subsidies, and cost-sharing reductions are based on estimated household yearly income. Coverage can also be disrupted if insurers leave the market or discontinue certain plan options.
To maintain coverage, people may need to switch plans, doctors, or networks.
Loss of Medicaid Coverage
People with Medicaid may lose coverage due to missed notices or deadlines, changes in eligibility rules, income increases, work requirements, or renewal paperwork that becomes overly burdensome or is not completed on time.
Cycling on and off coverage within short periods of time is a pattern known as “churn,” and it reduces access to care.
Changes in Medicare Coverage
Coverage through Medicare is also dependent on rules, regulations, and qualifications.
Americans generally become eligible for Medicare at age 65 or sometimes earlier due to disability or kidney failure. Medicare has specific guidelines on when a person can enroll in, or make changes to, coverage.
Missing those deadlines can mean no coverage for all or parts of Medicare and/or penalties that can last a lifetime.
Also, if their income changes or if they fail to complete recertification steps, people can lose eligibility for programs that help lower Medicare costs.
Open Enrollment and Special Enrollment Periods
Most employer-sponsored, Medicare, Marketplace, and TRICARE plans have an annual Open Enrollment Period. The dates can vary depending on the type of coverage, employer, or government regulations.
Outside of the open enrollment period, signing up for coverage is usually limited. However, certain life events can create a Special Enrollment Period.
These events may include getting married, having a baby, retiring, or losing job-based insurance coverage. A Special Enrollment Period provides a short window to enroll in new coverage or make changes to an existing plan.
These windows do not last long. If the deadline is missed, it may be necessary to wait for months until the next open enrollment period.
For new hires, employers can require a waiting period of up to 90 days before coverage starts.
The Risks of Coverage Loss
Coverage loss can cause stress and harm to health and finances.
When someone does not have health insurance, they may delay appointments, fail to follow through with recommended tests or follow-up, not take their medications as directed, or hesitate to seek emergency care. Any of these responses can worsen health outcomes.
Without health insurance protections, an accident or medical event, such as a heart attack, can cause medical debt that takes years to repay – or even result in bankruptcy.
These materials were supported by funds made available by the Kentucky Department for Public Health’s Office of Population Health from the Centers for Disease Control and Prevention, National Center for STLT Public Health Infrastructure and Workforce, under RFA-OT21-2103.
The contents of these materials are those of the authors and do not necessarily represent the official position of or endorsement by the Kentucky Department for Public Health or the Centers for Disease Control and Prevention.