Many Americans struggle to afford health insurance. Unexpected medical bills that don’t fall within their policy often crop up unexpectedly and leave them paying unexpected medical expenses out of pocket.
Failing to pay your premiums could result in your coverage being cancelled and open enrollment being the only time you can select a plan again. While there is no longer any penalty associated with not having health insurance coverage, that doesn’t mean it shouldn’t be part of your life plan.
You Will Have to Pay Full Price for Medical Care
Many uninsured people are shocked to receive bills for thousands of dollars from health care providers, typically because the healthcare provider billed for services outside their network or that were uncovered altogether by their plan. You can attempt to negotiate a lower price with them by explaining that you cannot afford their full amount and asking what insurance or Medicare typically pay so as to set up an affordable payment plan.
Paying off part or all of your bill immediately may reduce collection fees and save the provider money in the long run. You could try asking for a discount when paying in full or asking how they typically bill insurance companies or Medicare for similar services.
Most major medical health plans provide a one to three month grace period for late payments of premiums before termination occurs retroactively; new coverage cannot be obtained until open enrollment opens up again.
Once you are more than 30 days behind on your premiums, your health insurance company may place any incoming claims into “pending” status instead of processing and paying them immediately – meaning healthcare providers expect you to cover their full claim costs yourself while not enjoying any discounts negotiated through in-network providers as part of your prior plan.
Many hospitals are required by state law to offer charity care to individuals who cannot afford essential health services, including hospital visits, medication and devices such as CPAP machines for sleep apnea. You can find out if your hospital provides this form of assistance by calling the admissions department and asking them for an application or speaking to their financial counselor.
You Will Have to Pay a Penalty
From 2014-2018, people with high incomes who lacked health insurance faced a federal penalty when filing their taxes if their household income fell short of covering the national average cost of a bronze plan plan.
The penalty was designed to encourage everyone, rather than waiting until they needed care, to enroll in a minimum essential coverage plan. Although maximum penalties often reached thousands of dollars, they were estimated only to impact wealthier households and were expected to increase demand for coverage since people who waited to purchase coverage were likely to have greater medical needs and greater expenses than people who purchased coverage sooner.
Starting in 2019, the federal penalty for not meeting the individual mandate has been eliminated, although some states still impose state-specific penalties – for instance Massachusetts had an individual mandate in 2006 which began being assessed a penalty upon anyone lacking coverage unless an exemption applies.
If you receive a premium subsidy from your insurer, they may terminate it after three missed payments. To prevent this happening, November and December premiums must be paid before January’s grace period ends – otherwise termination could occur immediately.
Unsubsidized enrollees who fail to change or cancel their coverage during open enrollment periods will incur penalties that will be assessed based on their year-to-date income when determining their tax filing status. Those paying premiums directly will have their coverage renewed automatically for next year unless they choose otherwise during this period.
If your coverage has been terminated due to nonpayment of premiums, take proactive steps with your provider and negotiate a payment plan with them before they report your debt to a collection agency. Most providers are more than willing to work with their customers and would rather see payments come slowly rather than not at all.
As losing coverage due to unpaid premiums does not qualify as a special enrollment period either on or outside of an exchange, you will have to wait until the next open enrollment period to select a better health plan that fits within your budget.
You Will Have to Wait to Enroll in a New Plan
Missing monthly premium payments could eventually lead to cancellation of health coverage, forcing you to wait for either an open enrollment period or qualifying life event before enrolling again. This process can be time-consuming, so to prevent losing health coverage altogether it’s best to pay your premiums on time each month.
Your insurer typically gives you one month of grace before canceling your policy and ceasing to cover claims for health services you need. If payments don’t catch up during this timeframe, however, your health coverage will be lost and penalties assessed accordingly.
As of 2017, if you did not qualify for premium subsidies and your coverage was terminated due to nonpayment, during open enrollment time of your same insurer you could enroll without incurring past-due premium payments. Unfortunately, this rule will no longer be in place as of 2023.
If your income changes and requires you to upgrade or downgrade a tax credit level, your health coverage should also adapt accordingly. Be sure to inform the exchange/marketplace about this development so they can make appropriate adjustments in terms of subsidy eligibility.
As soon as your income changes, it is advisable to adjust your tax credit levels in order to prevent later issues with affording premiums for health care plans you desire.
If you do nothing, your premiums could skyrocket out of reach, preventing you from receiving coverage when needed most. By enrolling early, however, you can ensure the plan best fits your needs and save yourself from an unaffordable premium increase when open enrollment resumes.
You Will Have to Pay Medical Debt
Millions of Americans are facing medical debt issues, particularly those without health insurance coverage who pay full price for care they receive; when this debt accumulates it can damage credit scores and make securing loans such as mortgages or car purchases difficult. Furthermore, paying this debt often necessitates forgoing vacations, delaying home improvement plans, cutting household expenses back further or working additional hours as well as tapping retirement and savings accounts – the cumulative effect can be devastating and even lead to bankruptcy in extreme cases.
One effective way to avoid medical debt is paying your medical bills as soon as they arrive, although if this is impossible for any reason it may be beneficial to work with your provider to arrange a payment plan or reduce what is owed. In addition, it’s advisable to review healthcare provider bills thoroughly – particularly those without itemized statements – especially since medical bills can contain errors of up to 80% according to reports; by carefully going over statements you may catch errors such as duplicate charges for identical services and charges you never received in time.
Medical credit cards provide another viable solution to paying off expensive medical bills. They allow for payments in installments with an introductory period where interest will not accrue, however if your balance remains outstanding at the end of this timeframe interest will begin accruing on it and this debt could even adversely impact your credit score.
If you are struggling to pay your medical bills, financial assistance or bankruptcy may be your only options. Furthermore, it is wise to review your debt for errors and negotiate with healthcare providers for the lowest charges possible. In some instances, professional debt relief companies may help reduce medical bills by discovering and disputing mistakes on debt statements; additionally they may help negotiate debt reduction options from creditors in some instances or negotiate settlement of unaffordable debt at less than its original amount owed.
