Researchers found that gaps in coverage were associated with reduced access to care, preventive services utilization and financial well-being.1
As there are ways to reduce gaps in health insurance coverage, gaps can be minimized. You could save on healthcare costs with a health savings account or gap health plans (also referred to as supplemental health insurance plans). You could also ask your insurer for an exception in their network gap coverage agreement.
1. Loss of Employer-Based Coverage
Those insured through their employers typically won’t experience gaps in coverage; however, if you leave one job to take another or relocate to a different state or take leave of absence may find their health insurance does not automatically follow them and a gap could ensue.
State choices to forgo Medicaid expansion under the Affordable Care Act (ACA) is one of the primary factors contributing to health insurance gaps; however, they still persist among individuals with low incomes regardless of state actions; research demonstrates this has lasting and detrimental effects on access to care, preventive services received and financial wellbeing.
One of the main contributors to gaps in healthcare coverage is loss of employment. When people experience unemployment, their medical emergencies become much more likely and can become quite expensive if not covered by health insurance. Furthermore, individuals who already suffer from serious medical conditions are especially prone to consequences of an insurance gap.
A gap in coverage also means that individuals will lack access to preventive services that are essential for maintaining good health, which can be especially dangerous for those with chronic diseases who rely on preventive care to keep symptoms under control and low incomes. Furthermore, gaps can increase the chances that necessary procedures will go undone, which could have serious repercussions for both parties involved.
However, there are ways to mitigate the negative consequences of gaps in health insurance coverage. Many employers offer gap insurance plans alongside high-deductible health plans (HDHPs). Although gap plans typically carry higher monthly premiums than traditional policies do, they provide an up-front payment to cover unexpectedly costly medical services.
An HSA (health savings account) is another way of protecting yourself against gaps in health insurance. These accounts allow people to save pre-tax dollars for future medical expenses; however, these solutions may not provide adequate protection in cases requiring frequent and costly services.
2. Loss of Employer-Sponsored Coverage
Employer-sponsored health insurance coverage was the primary form of healthcare coverage in the US in 2020, accounting for 54.4% of covered people. Employer-sponsored plans can often be very cost-effective and employers frequently foot at least some of the premium for employees who opt in, making accessing coverage simpler for workers. Furthermore, many offer significant tax advantages if employees participate.
But if you change jobs or lose your current one, health coverage could become uncertain. Most employer-sponsored plans offer a transition period that enables you to continue receiving similar benefits for 60 days while shopping through the marketplace for an individual or family health plan – providing that enrollment by its deadline occurs. Using this special enrollment period (SEP), however, can prevent such gaps from developing further.
The Affordable Care Act has significantly decreased coverage gaps by expanding eligibility for Medicaid, offering tax credits that subsidize purchasing health plans through marketplaces and providing gap-closing mechanisms for uninsured. Therefore, it’s crucial that individuals understand their options if they fall into coverage gaps so they can plan for them ahead of time.
If you lose your job, your employer-sponsored health insurance will likely end as well. While new health coverage might take effect immediately or take weeks or even months before taking effect, in such an instance it would be prudent to wait for it before seeking care.
Over time, gaps in health coverage can have devastating repercussions for accessing healthcare and achieving financial security. Research indicates that gaps are associated with lower utilization of preventive services like mammograms, cholesterol checks, pap tests, flu vaccines and prostate and colon cancer screenings being received; those most at risk include low-income individuals as well as those living with chronic illnesses.
3. Decrease in Income
Losing their job often means losing their employer-sponsored health insurance, which is especially daunting for low-income workers and families living below the poverty line, where health care premiums constitute a large chunk of their income. The Affordable Care Act offers assistance via its marketplace to help lower these costs, but how much you receive depends on both income and household size; for this reason it is crucial that any changes to either are reported immediately in order to remain eligible for marketplace coverage accurately.
Even without any preexisting conditions, gaps in coverage can still be troublesome. Hospital bills can quickly mount up while studies demonstrate that those with gaps tend to have poorer health outcomes compared to those who maintain continuous coverage; such adverse health outcomes tend to become even more pronounced with extended gaps.
Coverage gaps have an adverse impact on the economy as a whole. Workers without health insurance are more likely to delay seeking treatment for their health conditions until it has worsened and thus raised costs across all spheres of healthcare – this in turn results in lost productivity from businesses and reduced efficiency for them as a whole.
Studies involving cross-sectional data have illustrated these associations between gaps in coverage and poor health and decreased preventive services, and gaps. Such results should hold for longitudinal data as well.
Closing the coverage gap has numerous economic advantages both for individuals and our state’s economy. Individually, it can provide protection from medical debt while opening up opportunities to pursue economic mobility such as training programs or starting businesses. On an economic level, closing it will decrease racial disparities in health insurance coverage while improving overall economic security.
New Yorkers looking to close their gap should lobby Congress to expand marketplace subsidies and Medicaid eligibility to adults earning up to 600 percent of federal poverty level. It should be remembered, however, that such strategies have varied consequences on patients, insurers, providers and the State budget.
4. Starting a New Job
177 million Americans currently hold employer-sponsored health insurance plans, but many policies can expire upon starting a new job or leaving one altogether. Losing your job could leave you without coverage until your new employer’s coverage kicks in – leaving gaps in your health coverage in the meantime. Luckily, there are ways to prevent gaps when changing jobs.
An option available to you is COBRA health insurance, which allows you to maintain the coverage from your previous employer until you find new work. Unfortunately, COBRA can be costly; expect at least half of what was being covered by your former employer along with an administrative fee of 2% of that premium plus an administrative charge fee of at least $50/month. Alternatively, enroll in your new employer’s plan during its open enrollment period (typically within 30 days of employment).
If you miss an employer plan enrollment period or are unable to enroll directly through your state Marketplace, coverage can still be obtained if certain qualifying life events such as unemployment occur. A special enrollment period allows individuals to sign up for individual marketplace health insurance plans with cost-sharing subsidies which could offset some costs of their new plan.
Closing gaps in health insurance coverage between jobs is crucial to ensure individuals have access to adequate healthcare during this transitional period and to minimize overall healthcare costs, so they don’t forgoing treatment due to financial constraints. Working with an experienced health insurance broker is one of the best ways to find reliable health coverage during life changes; they will assist you in selecting policies suited specifically to your individual needs and budget constraints.
Unemployment or job changes are two of the primary reasons for an interruption in health insurance coverage; however, other situations could also contribute to this gap such as moving to a new residence, taking parental/maternity leave, or retirement. No matter the reason behind any gap in coverage, it’s essential that individuals understand all their options when it comes to finding cost-effective and reliable health coverage solutions.