What Happens If I Don't Sign Up for Health Insurance?

You may think that health insurance is too expensive, or that you don't need it since you are young and healthy. After all, not having health insurance could save you a lot of money.

Unfortunately, under the  Affordable Care Act, you are required to have health insurance. Here's how it works: The Affordable Care Act (ACA) is set up to make it easier for people who can't afford health insurance get it. It is an attempt to make health care more affordable. One way it does this is require everyone to have health insurance. 

This will reduce the number of people who are unable to pay their medical bills, which drives up the cost of health insurance for everyone else. If you don't sign up for health insurance, you may have to pay a penalty under the ACA. You can avoid the penalties by staying on your parents' insurance or signing up for your own insurance. 

Here's what could happen if you don't sign up for health insurance. 

What Happens If I Don't Have Health Insurance?


If you choose not to have health insurance, you will face the fines imposed under the Affordable Care Act. These fines will be due when you file your taxes. 

The fine for the 2017 tax year is 2.5% of your total household gross income. So, if you make $100,000 you'd pay a $2,500 fine. While the fine has not yet been announced for 2018, it's expected to increase.

This is a significant amount, so if you decide to chance it and not sign up for health insurance, you should be ready to pay this amount and factor it into your budget. This in addition to any health-related expenses you accumulate over the year. 

Keep in mind that there are other financial risks associated with forgoing health insurance, which is why you should consider health insurance a necessity and not a luxury. 

Reasons to Get Health Insurance


While you may not want to spend the money on health insurance, there are a wide variety of reasons that you need to get health insurance.

  • It can be very expensive to deal with an unexpected medical emergency like appendicitis or a serious skiing accident. If you end up needing surgery or other long-term care, you will likely pay thousands of dollars for the care you need. The amount will vary depending on your city. If you end up needing to stay at the hospital for an extended period of time, the cost can really add up. 
  •  Medical debt can bankrupt you. Medical debt can negatively affect your quality of life, and having health insurance is one way that you can prevent yourself from facing this type of issue. Many hospitals will work with you to set up a payment plan, but the minimum payments may still be more than you can afford and it may take you years to pay off the debt. 
  • Health insurance makes it easier to go in to get preventive care so that you do not need more expensive procedures later. Taking care of small things like ear or sinus infections can prevent you from developing more serious complications, which may result in an emergency room visit or hospital stay. Annual physicals can help you catch things early, and avoid sizeable medical bills.​

Are There Affordable Options?


There are a variety of ways that you can obtain affordable health insurance. You may consider a high-deductible health plan (HDHP), which offers lower monthly premiums but higher deductibles.  If you do choose this option, you can also set up a Health Savings Account. This allows you to save to cover the deductible tax-free

Or you may be able to get coverage under your parents' health insurance, as long as you are under age 26. You should also explore health insurance offered by your employer, or even independent health insurance

However, the most affordable option may be through your state's health insurance exchanges through the Affordable Care Act.

When choosing a health insurance plan, you need to carefully choose the best policy that is currently available to you. Take the time to review your options and choose a policy that will work for you, both for your budget and health needs.  

What Is the Time Frame to Enroll?


Health insurance open enrollment for the 2019 coverage year begins Nov. 1, 2018, and runs through Jan. 21, 2019. If you enroll during this time, you will be covered for that year. Keep in mind that enrolling will prevent you from paying ACA fines. 

Remember that health insurance will protect you financially, as well. If you truly cannot afford health coverage, you may qualify to have the fine waived. If this is the case, you may want to see if you qualify for Medicaid or Medicare.

If you miss the deadline to enroll, you will face the fines imposed by the Affordable Care Act.  You can also enroll in independent health insurance throughout the year. An insurance agent can help you determine if the plan meets the basic qualifications.

Updated by Rachel Morgan Cautero