As one who recently lost their job for medical reasons, my previous coverage ended with my employment. I could’ve kept it under COBRA, but that would’ve cost ~$900/month. But having our household income drop to roughly one-third of what it was, we easily qualified for Medicaid.
The penalty really only applies to those that can afford their own insurance but choose not to get it. That way, you won’t have rich people passing more of their expenses on to taxpayers to get richer, while at the same time it gives insurance companies incentives to offer low-cost options to those too wealthy to qualify for Medicaid but too poor to buy their own hospital. In other words, most Americans don’t have to worry about it unless they go out of their way to make it a problem for themselves.
@Adirondackwannabe My understanding is that voluntary separation ends all benefits immediately, as do most cases of “with cause” termination. However, those who are laid off, terminated for medical reasons, or otherwise have their employment ended through no fault of their own get things like COBRA.
It’s possible for an employer to lay you off two seconds before you quit though. If the parting is amicable, they might go that route.