Americans are dependent on their jobs for more than income. Many of us get our health, life and disability coverage through our work.
So as the risk of job loss rises during a recession, so, too, does the risk of losing coverage that can protect us against catastrophic events.
As more and more people find themselves out of work, the 46 million the Census Bureau says already lack health insurance coverage can only increase.
Those without health insurance are one illness or accident away from financial devastation. What's more, as I detailed in "A survival guide for the uninsured," people without health insurance are more likely to die prematurely and suffer lower lifetime earnings as poorer health interferes with their ability to make money.
Losing life or disability coverage can be just as disastrous for a family's finances. Here's what to do to increase the odds you'll stay covered and solvent in a downturn.
Help with health insuranceTake advantage of your health coverage while you've got it. If you have a good health plan now, use it to catch up on any medical care you've deferred, such as physicals, health screenings (mammograms, colonoscopies, etc.), dental work and new glasses. If you're not sure what you need, talk to your physician.
This care will involve some out-of-pocket expenses at a time when you're probably trying to conserve cash, but you'll have to spend a lot more if you lose your job and have to purchase health care on your own. Speaking of which . . .
Use COBRA as a last resort. If you lose your job, federal law typically requires that your employer allow you to continue your health coverage under COBRA rules. The catch: You have to pay the full premium, which is much more than the discounted premiums employees usually pay, plus an administrative fee of up to 2%.To give you some idea of the cost, the average worker paid $279 a month in 2008 for family coverage or $52 for single coverage, according to the Kaiser Family Foundation (.pdf file), which tracks health insurance trends. Yet the actual total premium for health insurance averaged $1,057 a month for family coverage and $392 a month for singles.
If you and your family are healthy with no pre-existing conditions, you probably would be better off buying a high-deductible policy on your own. You have some time to shop around -- you're allowed 60 days to decide whether to sign up for COBRA benefits, and the coverage is retroactive.
To find an individual policy, start with the Blue Cross-Blue Shield provider in your state. Career coach Nancy Collamer, the author of "The Layoff Survival Guide," also recommends checking out eHealthInsurance and DentalPlans.com.
If you can't qualify for a cheaper policy, you may be stuck with COBRA. If you can't swing the premiums because your income is too low, you may be able to get coverage at least for your children and perhaps for yourself. Start by checking InsureKidsNow.gov.
Reduce your out-of-pocket medical expenses. Regardless of the type of coverage you wind up with, you can ratchet down the costs of care. Readers who post on the Your Money message board recommend the following:
- Stay as healthy as possible. Eat right, exercise, get enough sleep, maintain a good weight, take a multivitamin, brush and floss your teeth, quit smoking, drink in moderation or not at all. "We believe that good health comes from a healthy lifestyle," wrote "lone banker," who along with his wife is covered by Medicare. "We will be 69 this year (and), except for our annual checkup, we have minimal medical expenses."
- Use your insurer's mail-order pharmacy. You could save one-third to one-half of the money you now pay for your prescriptions. Mail-order pharmacies affiliated with insurers typically provide a three-month supply of a drug for the price of two or even a two-month supply for the cost of one month. You also can buy many generic prescriptions at Target or Wal-Mart for just $4 a month.
- Use discount or online prescription-eyeglass stores. Buying glasses from your eye doctor is the most convenient way to go, but it's also among the most expensive. Poster "Robert26" buys glasses every two years from a discount place that also performs a basic eye exam. "If there is a problem with my eyes they tell me to go to (an ophthalmologist)," he wrote. "Glasses are about half of what they are at (an ophthalmologist's office) and the same quality. I also use coupons if they are sent to me or in the paper."
- Use "urgent care" clinics instead of emergency rooms. A phone consultation with a doctor is another way to reduce costs.
- Understand your coverage. Read the summary your insurer provides. If you're not sure whether something's covered, call your insurer and ask. Don't be afraid to question your doctor's recommendations for tests and screenings to find out what's really necessary and what it might cost you. "Some things are not considered part of a yearly physical," wrote poster "DramaQ1015," "and just because your doctor wants to do it then, don't assume that you won't be paying out the nose for it."
- Negotiate. Ask for discounts if you pay cash or have a substantial deductible.