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Can You Afford to Be Uninsured?

The federal penalty is gone, but the significant risk of being uninsured doesn’t go away

Written by: Andrew Hall.

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 pocketOut-of-Pocket Maximum (OOP) is the maximum amount of money an individual will pay towards out of pocket expenses like deductibles, co-payments, and co-insurance. for health care services can result in hefty financial burdens that last for years.

  • High Deductible Health Plans (HDHPs)A High Deductible Health Plan (HDHP) is a type of health insurance plan that features higher-than-normal deductibles. These high deductible amounts are usually intended to lower your monthly premium payments. provide low-cost coverage for people looking for coverage in the event of a catastrophe.

Female bicyclist pedaling uphill.

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.

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, [1] 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 2020, individuals are only eligible for HSAs if they have a $1,400 deductible, but can save up to $3,550 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 $7,100 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.


If I don’t have health insurance, where do I go to get it?

You can go online to the healthcare marketplace. The Marketplace [2] site will ask you basic questions about your income, your family size, where you live, etc. and will provide an overview of the insurance options (both private and public) for which you qualify. But ultimately, you will have to decide what you want to spend and what is best for you and your loved ones.

I just can’t afford insurance options, what can I do?

Find out if you qualify for Medicaid. Medicaid is a state-based assistance program for people under the age of 65. Patients usually pay no part of costs for covered medical expenses, although a small copayment may be required.

Each state sets its own guidelines regarding eligibility and services so you should contact your local Medicaid office directly.

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