Not having health insurance can lead to exorbitant healthcare bills that can destroy your finances. Yet, only a handful of states require health insurance.
Until 2019, the Affordable Care Act required nearly all Americans to have health insurance. Congress removed that individual mandate penalty. Though most Americans aren’t forced to have coverage, health insurance can play a vital role in helping pay for your care.
What Happens to Americans With No Health Insurance?
You may incur large debt if you don’t have health insurance, and it can even lead to tax penalties, depending on where you live.
Without health insurance, you’re likely on the hook to pay for hospitalizations, medical care, medical devices and medications. For instance, health insurance plans typically cover prescriptions. Americans spend more than $1,000 on average annually on medications, according to the Congressional Budget Office. If you have coverage, insurers will pay most of that cost.
Health insurance also covers preventive care like annual physicals. That kind of preventive care can catch health issues like high blood pressure before they cause bigger problems down the road. That’s why health insurance is a wise decision even if you’re young and healthy.
You will likely pay premiums, health insurance deductibles, copays and coinsurance if you have coverage. However, those costs will be nothing compared to paying hospital bills without health coverage.
A recent Health Care Affordability Survey by The Commonwealth Fund found that more than eight out of 10 adults with medical or dental debt reported at least $500 in debt. Nearly one-quarter (22%) said they had at least $5,000 in debt. More than half of the debt came from hospital care and 37% from doctor visits.
Not having health insurance can also affect your health since people often delay needed medical care if uninsured.
The Health Care Affordability survey also found that 38% of people said they skipped or delayed healthcare or prescription drugs because they couldn’t afford it. About one-third (34% of respondents) said medical debt is why they put off needed care.
Even so, about 26 million Americans don’t have health insurance. A Kaiser Family Foundation survey found that 64% of those without coverage said they couldn’t afford it. Another reason offered was that 26% of respondents said they don’t want or need it.
Which States Require Health Insurance?
Five states and the District of Columbia have individual mandates, which require that residents have health insurance. If you don’t have coverage, you may face a tax penalty. Here’s a look at the states that require health insurance.
| State | Penalty |
|---|---|
|
California
|
$900 penalty per adult and $450 per dependent child under 18
|
|
Massachusetts
|
Between $288 and $2,100 per person, based on income
|
|
New Jersey
|
Between $695 and $4,284 per person, based on income
|
|
Rhode Island
|
Penalty of 2.5% of your annual household income or $695 per person and an additional $347.50 per child under 18, whatever is greater.
|
|
Vermont
|
Coverage is mandated, but there’s no financial penalty.
|
|
Washington, D.C.
|
Penalty is 2.5% of household income or $695 per person and $347.50 for a child under 18, whichever is greater.
|
What Can You Do If You Don’t Have Health Insurance?
If you don’t have health coverage, hospitals and doctors will still provide care, but you won’t get financial help from a health plan.
You would have to pay out of pocket for those costs. That can get expensive, with the cost of treating a broken leg averaging $7,500 and a three-day hospital stay costing $30,000, according to the federal government.
Hospitals often have charity care for people who can’t afford care and typically offer payment plans. You can also negotiate with a hospital to make a medical bill more affordable.
By federal law, nonprofit hospitals must offer financial assistance to people who cannot pay their bills. Some states also have laws about uncompensated care, such as Washington, where all hospitals must tell patients about financial assistance programs when they receive care.
If you struggle to pay for your care, the federal government urges you to notify the hospital. You can learn more about your rights at the Consumer Financial Protection Bureau website.
How Can You Get Health Insurance?
Most people get health insurance through an employer, but there are many ways to get coverage.
| How to get coverage | What to know |
|---|---|
|
From your employer
|
Group health insurance
through an employer is often the cheapest way to get health insurance because your employer helps pay for coverage. |
|
From a spouse’s employer
|
Companies often allow employees to add a spouse and children to plans. Adding family members may increase costs significantly.
|
|
COBRA
|
If you lose employer-sponsored insurance,
COBRA health insurance
allows you to extend the coverage temporarily. COBRA is usually very expensive since employers typically don’t pay for COBRA coverage. |
|
Health insurance marketplace at HealthCare.gov
|
The
Affordable Care Act
health insurance marketplace allows you to compare coverage available in your area. You may qualify for premium tax credits and subsidies to reduce coverage costs, depending on household income. |
|
Directly from an insurance company
|
Insurers may offer health plans directly to consumers. Unlike ACA plans, these plans aren’t eligible for subsidies and premium tax credits.
|
|
Medicaid
|
The federal/state health insurance program is for low-income Americans. Medicaid bases costs on household income for those who qualify.
|
|
Short-term health insurance
|
Short-term health insurance
plans offer cheap coverage with less coverage than what’s found in standard health insurance. These plans should be seen as a potential way to bridge a coverage gap and not a long-term health insurance solution. |
|
Catastrophic health insurance
|
Catastrophic health insurance
is only for people under 30 and those facing severe financial hardship like homelessness. These plans cost less than standard coverage but have higher out-of-pocket costs when you need care. |
Can You Get Health Insurance at Any Time?
You can buy health insurance during annual open enrollment. The exact timeframe depends on the coverage.
For instance, the ACA marketplace open enrollment is from November 1 to January 15 in most states. Employers decide on their own open enrollment periods. Medicaid doesn’t have open enrollment—you can apply for Medicaid any time if you qualify.
If you miss open enrollment, the only way to get an ACA or employer plan is if you experience a qualifying life event, such as getting married or having a child. If you have a qualifying life event, it starts a special enrollment period and you can buy health coverage.