Can You Afford to Be Uninsured?
Key Takeaways
As of 2019, there is no longer a federal penalty for being uninsured.
Some states still enforce a penalty. Check on your state’s status of uninsured fees before choosing to forego insurance.
In the event of an unexpected health care need, paying out of pocket for health care services can result in hefty financial burdens that last for years.
High Deductible Health Plans (HDHPs) provide low-cost coverage for people looking for coverage in the event of a catastrophe.
Is there a penalty for being uninsured?
The United States government no longer charges a federal penalty to individuals who do not have health insurance. However, some states still enforce penalties on those who do not have health insurance coverage.
Before deciding to go uninsured, be sure your state does not charge a penalty.
Find a local Medicare plan that fits your needs
Why do I “need” insurance if there’s no penalty?
The cost of “self-pay” and “out-of-pocket” expenses for healthcare are high—year after year, the cost of routine care increases. Things like Emergency Room visits and hospital admissions stand to put a heavy financial burden on families without substantial savings for crises.
With over half of American bankruptcy filings being associated with medical debt, having health insurance (even at the catastrophic level) can provide many financial protections. Without insurance, unforeseen health problems can expose you to crippling costs.
Here are a few examples of the cost of care without insurance
- Fixing a broken leg: $7,500
- The Average cost of a three-day hospital stay: $30,000
- Comprehensive cancer care: over $100,000
- Single prescription drug price: $268
Having a health insurance policy can protect you from exposure to unexpected costs. In any of the examples above, [i] you’d still save anywhere from thousands to tens of thousands of dollars after your plan’s cost.
What type of plan is best for basic protections?
High Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) are an excellent option for coverage to protect you in a catastrophic event but has low monthly premiums.
As of 2021, individuals are only eligible for HSAs if they have a $1,400 deductible, but can save up to $3,600 a year for health care services if they choose to enroll in an HDHP. Families are eligible for an HSA if they have a $2,800 deductible and can save up to $7,200 a year.
There are many advantages to an HDHP with an HSA which include:
- Low monthly premiums.
- Financial protections that limit your health care spend exposure.
- Funds in HSAs collect interest.
- HSA funds roll over year to year.
- Funds are saved for future medical costs and retirement health costs.
- HSA contributions are tax-deductible.
Are you eligible for cost-saving Medicare subsidies?
