If you're a U.S. resident, PPACA has made this a lot easier. I recently bought an individual health plan on healthcare.gov for $250/mo (not including subsidies). If you make less than $50k/yr the amount is further subsidized. It can be more if you have a family, but in any case, with a fellowship income of $6k/mo you should be able to buy a health plan, at least for those two months.

It's my understanding that the grant should be used on the business, not necessarily the incomes of the people working on it.

My read was that the main business expense is expected to be the expenses of the founders, so it's perfectly okay to use the money to pay for rent / food / insurance / etc.

Older people are more likely to have a spouse with insurance or to already be freelancing/contracting and used to providing their own insurance. Even in the days before Obamacare, I think there was a short time you were allowed to be uninsured without being excluded by insurance companies. COBRA also helps fill the gaps (in addition to Obamacare itself).

Right, but the COBRA premiums could easily eat up a significant chunk of that grant.

In CA with no income, health insurance is 100% free even with really strong income in the previous calendar year.

But does that include situations in which you quit your job to do something like this?

Please check the fine print, but that is exactly what I did. I quit my job, moved to SF and realized that if I didn't get insurance I would have to pay a huge penalty at year end. I looked in to affordable insurance and found out California offers free insurance if you have zero income.

it's 2 months. if you really need it just get travel insurance. that should be do-able in 12k.

It's quite unlikely that travel insurance would cover chronic and critical illnesses like cancer though, which other forms of healthcare would cover.

If I have the dreaded "Pre-Existing Condition!", somehow I doubt that would work.

then maybe you should find a jerb. entrepreneurship is risky.

That's an extremely terrible answer that really only serves to diminish the diversity of startup culture.

Might not be the answer you want to hear, but it's the truth. If you can not deal with the ambiguity of not being covered for long term illness by insurance, entrepreneurship is likely not for you.

No, it's not the truth. There is absolutely nothing correlating entrepreneurship with not being able to insure yourself or your family. The only reason that is right now is because the startup culture is filled with 20 somethings right out of school, and no one wants to change that.