Don’t Have Health Insurance? Here’s What You Should Know

Deciding to not sign up for health insurance may seem like a good idea in the moment, but when you look at the hard facts, it’s a risky endeavor. Not only will you be penalized come tax time, if a medical emergency were to arise, you can end up with heavy hospital bills. Healthcare can become absurdly expensive in the United States, potentially sinking you into debt for years, if not the rest of your life. Here are some facts to consider when choosing to live without health insurance.

You Risk Severe Health Problems

Beyond the extremes of freak accidents and disaster scenarios, not having health insurance starves you from the chance to take the precautionary measures that are recommended to avoid certain diseases and conditions. Without regular checkups, you are taking enormous risks on your health. The risk factor is doubled if you have a preexisting condition or if you are pregnant. Plus, you risk getting sick and leaving behind your family to deal with the aftermath of a preventable illness. The point: not having health insurance often affects more than just you.

You Risk Bankruptcy

Even the world’s richest people have insurance. This is because the cost/risk analysis checks out in favor of being insured. Paying out-of-pocket for accidents you did not have any part in causing—or even those that you may have been liable for—is an enormous waste of money. The most benign car crash can easily cost $10,000. Know that this hefty price tag is only the first of many bills associated with the original accident, as you would also need to cover the subsequent charges for injury and pain management, from physical therapy to lost wages. Medical expenses are no exception to the trend of rising costs we see in the current economy.

 

You Will Pay a Penalty

In an effort to encourage everyone to have insurance, even if only minimum coverage, the Affordable Care Act (ACA) enforces a penalty for taxpayers who do not enroll in a healthcare plan. If you or your children do not have health insurance, you must pay a fine when it’s time to file taxes. It’s also called the Shared Responsibility Payment, mandate, or Obamacare penalty. Depending on which amount is higher, the fee that is due comes to:

  • $695 per adult, or
  • 5% of your household income

You will be penalized 1/12th of this amount for each month you go uninsured. Conversely, you would be exempt of the penalty if you are uninsured for only a couple of months. Note that health insurance laws will change in 2019. A new policy in Washington has repealed the Shared Responsibility Payment. When you file your taxes in 2020, you will no longer be penalized for not having health insurance.

You Could Qualify for an Exemption

Other exemptions apply when you qualify. You may be eligible for the Health Insurance Exemption, in which case you would submit IRS Form 8965 on your tax return. Exemptions are either granted by the Marketplace or the IRS, and you must meet certain requirements to receive an exemption. Some examples of such qualifying circumstances include, but are not limited to:

 

  • Your annual premiums represent 8% of your household income
  • You’ve experienced a life event that has caused a hardship that the IRS recognizes as qualifying for an exemption
  • You identify with a group that is exempt

You Could Qualify for a Catastrophic Healthcare Plan

Catastrophic Health Care Plans are another development to keep in mind for 2019. As the name suggests, the plans cover accidents and other extreme cases of health complications.  Expect high deductibles with low monthly premiums. With no copayment, you must first pay $7,900, after which your insurance company will cover expenses. Those who can enroll in Catastrophic plans can be broken down into two categories:

  • Anyone under 30 years of age
  • People with a hardship exemption over the age of 30

While it may seem like there is no place for you in the healthcare system, provisions exist to ensure that you get the insurance you need. After all, healthcare is a necessity, not a luxury. It just may take a little research to find the best plan for you. It will be worth your while in the long-run, and you’ll certainly be grateful for the coverage if you end up needing it.

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