Health insurance can be expensive, and if you’re healthy, you may not experience any benefits from your policy. If you’re having a hard time paying your bills, you might seriously consider dropping health insurance coverage. But is that a good decision?
We’ll provide expert advice on why you need health insurance even when you’re healthy and young. But we’ll also share ways you can save. You can do a health insurance price comparison and choose a plan that costs less and is a good fit for healthy people.
While eliminating a monthly payment certainly carries a financial benefit, it’s not worth the legal and financial risks.
Legal Ramifications of Dropping Health Insurance
Following the passing of the Affordable Care Act, everyone in the U.S. was required to carry health insurance unless they qualified for an exemption. If you couldn’t prove that you had a compliant health insurance plan, you would face a penalty.
The individual mandate was unpopular and several years later, the penalty was removed. So, while there is still technically a federal mandate to have health insurance, there’s no federal penalty associated with not having it.
However, some states have a penalty for not carrying health insurance. If you reside in one of the following states, a fine will offset the financial benefit of eliminating health insurance.
California Requires Health Insurance
There are many great reasons to move to California, but if you live there or are considering relocating to the state, you need to know that you must carry health insurance or face the consequences.
After the federal penalty ended in 2019, California passed legislation enacting a state mandate with an associated penalty if you don’t carry health insurance. This law went into effect in 2020.
Massachusetts Penalizes Those Without Insurance
Massachusetts started penalizing residents who didn’t carry health insurance in 2006, before the Affordable Care Act. Then, once the federal penalty began in 2014, Massachusetts dropped its state penalty, but after the federal government stopped fining individuals without health insurance in 2019, Massachusetts enacted its state penalty again.
New Jersey Fines Those Without Health Insurance
While New Jersey didn’t have a preexisting mandate and associated fine, they enacted a state mandate and penalty for non-compliance that went into effect as soon as the federal mandate ended.
Rhode Island Requires Health Insurance
While Rhode Island didn’t start penalizing those without insurance immediately upon the expiration of the federal penalty, they had a mandate and fine in place by the following year.
Washington D.C. Demands Residents Carry Health Coverage
New Jersey, Washington D.C. had an individual mandate implemented with a fine for non-compliance when the federal order ended in 2019.
Financial Impact of Skipping Health Coverage
Even if you have good health and a family history free from major health concerns, there’s no guarantee you’ll never face a health crisis.
Risk of a Catastrophic Injury
A catastrophic injury is one of your most significant health risks if you’re young and healthy. You might be at low risk of heart disease or diabetes, but you have the same chance of an injury as anyone else. And if you participate in risky activities like sports or extreme adventures, your risk could be even higher.
Medical care is expensive, and without insurance, you’ll be responsible for paying your healthcare costs out-of-pocket, which could leave you with lifelong debt.
For example, if you break your leg, require surgery, and spend months in physical therapy, you might have medical bills totaling $50,000 or more. And if you have a back, head, or multiple injuries, your medical bills could be far higher.
Possibility of Serious Health Conditions
Even if you have a low risk of developing a serious health condition, you don’t have a guarantee that you’ll remain in good health forever. Treating ongoing health conditions can result in insurmountable medical bills.
You can’t guarantee prevention even if you’re taking steps to lower your cancer risk. If you were diagnosed with cancer, your treatments would be so expensive that you might have to exhaust your life savings and qualify for Medicaid as your only option to pay for the care you need.
The risk of catastrophic medical bills should be enough to make you understand the importance of health insurance and how essential health insurance is.
Finding Health Insurance for an Affordable Cost
The Health Insurance Marketplace has several plan tiers. The lower tiers cost the least but provide the least coverage, while the higher levels require high premiums but provide extensive coverage.
Subsidies for Health Insurance
If your income qualifies, you could be eligible for subsidies to help you pay for your health insurance premiums. If you check out the Health Insurance Marketplace, you can see if you qualify for assistance.
If you have children, they may qualify for the Children’s Health Insurance Program (CHIP), depending on your household income. In addition, low-income adults may be eligible for Medicaid.
Health Insurance Plans That Cost Less
Not all health insurance plans cost as much as premium plans.
High Deductible Health Insurance Plans
High-deductible plans are often the best option for young and healthy individuals. Because the policyholder is required to pay a significant deductible and is responsible for even higher out-of-pocket expenses, the insurance company has less risk of paying a claim. So, these plans have the lowest premiums of traditional health plan options.
But if something catastrophic happens, you’ll face a maximum annual out-of-pocket expense of just over $7,000. That protects you from the risk of having hundreds of thousands of dollars of medical bills.
Employer-Sponsored Health Insurance Plans
When you’re comparing employers, your hourly wage should be an essential factor, but there’s more to a good job than that. For example, it might be worth choosing an employer who offers excellent health insurance coverage. Many employers cover some or all of their employees’ health insurance premiums.
Even though health insurance may seem like a waste of money, when you consider the possibilities of excessive healthcare costs related to unexpected medical events, you should be able to see how important it is to carry health insurance.
If you’re young and taking care of your health properly, you might choose a lower-cost plan that offers less coverage but will kick in once your medical bills exceed a catastrophic amount.
Author Bio:
Melanie Musson writes and researches for the insurance comparison site, ExpertInsuranceReviews.com. She’s passionate about helping others understand how the right insurance policy can protect their financial stability both now and in the future.