Health insurance in the U.S. can be expensive. Even if your employer offers a health care plan, the out-of-pocket costs can be high. From 2010 to 2020, employees' share of premium costs rose by 40%, outpacing wage growth, according to the Kaiser Family Foundation. And for the roughly 50% of the U.S. population without an employer-sponsored plan, the costs can be much higher.
That may make it very tempting to go without health care insurance, especially if you're just barely covering other basic necessities, or you're young and healthy and don't think you need much medical care. Having health insurance in the U.S. is not legally mandated, though some states still impose penalties for certain residents who forego coverage. But health insurance is important enough to prioritize it right after shelter, food, and transportation to a job, if you have any way to afford it. And if you don't, there may be other options.
What Happens If I Don't Have Health Insurance?
The Affordable Care Act was set up to make it easier for people who couldn't afford health insurance to get it. It was an attempt to make health care more affordable for everyone by reducing the number of people who can't pay their medical bills, which drives costs up for everyone else.
The ACA set up penalties for not having health insurance, in order to try to keep people from not being able to pay their medical bills. This portion of the ACA was repealed in 2019, with the authority to enforce health care transferred to the states. Depending on the state where you live, you may be required to pay a fee when you file your state taxes if you do not have health insurance. Check your state health care regulations to be sure.
If you are fined by your state for not having insurance, it could be a significant amount, so if you decide to take the chance of not having health insurance, you should be ready to pay this amount and factor it into your budget.
Keep in mind that there are other financial risks associated with forgoing health insurance, such as not being able to pay for health care. This can turn into large amounts of debt should you need more than minor care. Some 17.8% of Americans with credit reports have medical debts in collections. This is why you should consider health insurance a necessity instead of a nice-to-have.
Reasons to Get Health Insurance
While you may not want to spend the money on health insurance, there are important reasons that it should be a high priority. Dealing with an unexpected medical emergency like appendicitis or a broken leg from an accident can be very expensive. According to HealthCare.gov, casting a broken leg can cost $7,500. If you need to stay in the hospital for three days, expect a bill for around $30,000.
Medical debt can bankrupt you. If you are in a car wreck and break both legs, you'll be in the hospital for a few days. A bill of $15,000 for the broken legs and $30,000 for the three-day stay could suddenly put you in $45,000 of debt. 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 decades to pay off the debt.
Health insurance makes it easier to get preventive care, too, 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.
Many plans help cover the cost of annual physicals. Annual physicals can identify unknown medical problems, possibly preventing you from collecting unexpected medical bills.
Are There Affordable Options?
There are several ways that you can obtain affordable health insurance. If you are under 26 years old, you may be able to get coverage with your parents' health insurance plan.Or, you might be able to get coverage through a spouse or domestic partner. Other consumers should explore health insurance offered by their employer, or even independent health insurance—plans that may be available outside of the Obamacare marketplace exchanges.
However, the most affordable and accessible option may be through your state's Obamacare exchange. These exchanges are websites set up to assist you in finding health insurance plans that are right for you. The cost of these plans varies significantly, and a tax credit can significantly lower your premium if you qualify.
When you're choosing a plan, you may want to consider a high-deductible health plan (HDHP), which offers lower monthly premiums but charges higher deductibles. If you do choose this option, you could set up a Health Savings Account (HSA). An HSA is an account into which you can save pre-tax dollars that you can spend on medical payments, including copays and deductibles.
What Is the Time Frame to Enroll?
The open enrollment period for Obamacare plans is the time of the year when most people can sign up for a marketplace health insurance plan. These dates change every year, but tend to fall in the autumn for coverage starting in January. If you miss the open enrollment period you'll have to wait another year to sign up, unless you qualify for a special enrollment period through a life event like losing a job, having a child, or getting married.
Most people can enroll at Healthcare.gov. But residents of 18 states will need to sign up through their state's website. If you miss the deadline to enroll, you may face state fines if your state imposes them, so be sure to stay on top of your enrollment.
If you truly cannot afford health coverage, you may want to see if you qualify for Medicaid. You can apply for Medicaid at any time of year.
You can also enroll in independent health insurance throughout the year. An insurance agent can help you choose the best plan for you.