Health Insurance After Death Of Policy Owner

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Jessica Fox 26-08-2021

Getting Health Insurance After Death Of Policyholder Has Passed

Health Insurance After Death Of Policyholder - ConsumerCoverage

Nothing is more heartbreaking than losing a loved one. If that loved one happens to be your health insurance policyholder, you won’t lose coverage, but you will have to explore other options. Fortunately, many health insurance options are available for you and your dependents (if applicable).

Let’s go over some health insurance choices, so you can find the best fit for you and your family.

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Notify Your Insurance Company Of The Policyholders Passing

However, before we explore the options available, remember that you have an obligation to your insurance company to notify them of your spouse’s passing. Informing your insurance company triggers the policy cancellation. 

Terminating the policy also:

  • Provides you with proof of policy termination that other insurance companies require.
  • It may mean you get unused and paid health premiums back (depending on how far into the policy you are).
  • It is a Qualifying Life Event, which means you can enroll in Marketplace or Off-Exchange insurance.

COBRA Insurance

If you’re under your spouse’s healthcare insurance, then if your partner passes, you can retain the same coverage through Consolidated Omnibus Budget Reconciliation Act or COBRA for 36 months. However, the catch is you’re now financially responsible for 100% of the premiums. Typically the employer pays 80% of the fees as well as the 2% administrative costs while the employee pays the rest, so it quickly adds up to a hefty rate.

Although COBRA is one of the most expensive options, it is well worth the cost for some people. For instance, if you’re undergoing treatments under your spouse’s plan, as you had excellent coverage, that’s reason enough to retain the benefits you have. 

Medicaid Insurance

Not everyone can afford a sizable health insurance plan. Medicaid is a government-sponsored health insurance plan that helps policyholders pay for their healthcare costs with subsidies and tax credits.

Medicaid and any ACA-compliant health insurance plans, like Marketplace, under federal law must cover these areas:

  • Ambulatory Patient Services (outpatient)
  • Prescription Drugs
  • Pediatric Services (including dental and vision care)
  • Preventative Care (physicals and immunizations)
  • Laboratory Services
  • Emergency Services
  • Hospitalization (inpatient care)
  • Mental Health Care And Substance Disorder Services
  • Rehabilitative And Habilitative Care
  • Maternity, Pregnancy And Newborn Services

To apply for Medicaid in most states, you must meet certain criteria:

  • You make 138% less than the federal poverty line, which amounts to $17,608 a person or $36,156 for a family household of four. 
  • State requirements — namely, if your state has expanded Medicaid requirements.
  • If you’re pregnant, have a disability, or have a child under 19 years of age.

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Qualifying Life Event And Marketplace Insurance

You’re eligible for Marketplace healthcare insurance, any time of year, even if it’s outside the Enrollment Period, as the loss of a loved one is a Qualifying Life Event. 

Qualifying Life Events permit you access to a Special Enrollment Period, but you have a 60-day window to select the right Marketplace coverage for you. Additionally, you’ll need proof from your previous insurance company of your health insurance termination; then, you can choose the right coverage for you. Lastly, be sure to inquire about all the government subsidies that you’re eligible for to reduce your rates further.

Private Health Insurance Or “Off-Exchange”

Off-Exchange, private health insurance is ACA-compliant and is offered by insurance companies. Unfortunately, since Off-Exchange health insurance aren’t government-funded, you aren’t entitled to subsidies or tax credits. However, one benefit is you can work with a licensed agent who can pair you with the ideal plan to meet your budget and needs.

It is important to note that if your spouse had private insurance, like Marketplace’s Special Enrollment Period, Off-Exchange considers your loss a Qualifying Life Event so you can buy the right health plan for you during a Special Enrollment Period.

Medicare

For individuals over 65 or with a permanent disability, there is Medicare. You’re auto-enrolled for Original Medicare at 65 (Plan A and Plan B coverage). You can also expand your Medicare coverage by enrolling in Medicare Advantage or selecting Supplemental Coverage (Medigap). However, Medicare health insurance is only an option for qualifying adults. There is no need to look into other health insurance options if you’re eligible for Medicare; just find your plan and enroll. 

Keep in mind, like other government-sponsored health initiatives, there is support for low-income individuals, so be sure to inquire about your options before enrolling.

What Happens To A Health Policy After The Policyholder Passes?

Although thinking about your spouse’s passing is not something you want to entertain, you may want to consider your options to ensure your healthcare is covered after they are gone. So even if you and your partner are enjoying life, like creating a will, dedicate some time to figuring out which health insurance option is your best bet; that way, if that day comes, you’re prepared.

Jessica FoxJessica Fox has been a freelance writer for five years, with a specialty in health, wellness, and insurance. During this time, she’s written for some of the biggest B2B and B2C brands from around the world. Jessica is also the mother of two young daughters and loves coffee, writing, and working out.