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What Happens If You Don’t Have Health Insurance?

Sidecar Health

July 30, 2021

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What Happens If You Don’t Have Health Insurance?

Over the past three years, the number of uninsured Americans has risen, growing from 26.7 million in 2016 to 28.9 million in 2019. During that same period, the rate of uninsured Americans increased from 10.0% in 2016 to 10.9% in 2019. Estimates for 2020 assume the number of uninsured Americans has risen to 30 million and this was before the covid 19 pandemic…

If you find yourself in this group, you might be wondering what happens if you don’t have health insurance. In fact, many people, asking themselves why health insurance is so expensive, wind up avoiding health insurance altogether…running the risk of facing crippling costs later on. Today, we’ll discuss the risks and consequences of not having insurance, and what you can do if you’re uninsured.  

What if I Don’t Have Health Insurance? 

Under the Affordable Care Act (ACA) of 2010, all Americans are required to carry health insurance in some shape or form. When it was first passed, the ACA included a penalty called the “shared responsibility payment,” known colloquially as the “individual mandate.” This penalty fined people who failed to purchase health insurance, and was enforced at the federal level. 

Enforcement ended in 2019 after the Trump administration passed the Tax Cuts and Jobs Act. A key section of the bill stripped this enforcement provision, leaving it up to states to decide whether or not to compel citizens to obtain insurance. 

Since then, certain states have decided to implement an individual state mandate, punishing residents for noncompliance. 

Those states include:

  • Massachusetts 
  • Washington D.C.
  • New Jersey
  • Rhode Island
  • California
  • Vermont  

While each state’s enforcement is different, most follow the original model set by the IRS, with individual mandate penalties that can either be paid voluntarily or deducted from tax refunds. 

So, legally speaking, this is what happens when you don’t have health insurance—but the consequences go far beyond potential fines. 

What Are the Risks of Being Uninsured

Being uninsured is much like a gamble. By saving some money on insurance costs, you risk losing a huge amount on any necessary hospital bills. If you remain perfectly healthy, you save money. If anything unexpected happens, you risk losing a significant amount.

The problem is that when it comes to unexpected healthcare, it’s just that: unexpected. 

The most significant reasons for concern include:

A Medical Emergency

Have you considered what would happen to you if you unexpectedly got sick or injured as an uninsured person? 

Whether it’s the result of a car accident, appendicitis, or something else, a sudden trip to the hospital can be expensive. Depending on the seriousness of the injury or illness, there might be dozens of medical bills and costs involved, including:

  • The ambulance ride
  • Emergency room service
  • Surgery
  • Extended stay
  • Medicine
  • Physical therapy  

Naturally, medical emergencies are more costly than a normal trip to see the doctor. According to KHN

“A trip to the emergency room is, on average, 12 times higher than being treated at a physician’s office for common ailments. That translates to $2,032 on average compared to $167. That same trip is also ten times higher than a visit to urgent care, which on average costs $193.”

Depending on the severity of the injury, costs can rise into the tens of thousands of dollars.

Medical Bankruptcy

Could you afford a sudden expense of $1,000?

Only 39% of Americans report that they would have enough savings to pay for a $1,000 emergency room trip without taking out credit. Many respondents said they would have to put it on their credit card, but that’s a high-cost solution, especially when you account for interest on the payments.

Medical debt could bankrupt you. All it takes is a slip and a fall to jeopardize your financial health. Although most hospitals will work out a payment plan if you are uninsured, the minimum payments could still exceed what you can pay monthly. 

And it may take years to settle your debts.

We’re not trying to scare you, we promise. But even if money is tight, at the very least you should have a bare bones emergency health insurance plan to protect you from massive unexpected costs. It’s better to pay a little upfront to avoid having to pay an enormous bill when you’re not prepared for it.

Preventative Care

One of the most important reasons you see the doctor annually is to catch small health problems before they can become more threatening to your health. Many healthcare plans require that preventative services be covered by insurance policies with no copay. 

Healthcare services such as:

  • Routine checkups
  • Blood pressure check
  • Cholesterol check
  • Flu shot
  • Sigmoidoscopy
  • Colonoscopy
  • Mammogram
  • Pap smear

Not having health coverage would keep you from accessing these potentially free care services.

But preventative care is one of the most important ways you can protect your health—and your bank account. By undergoing annual checkups, your doctor may be able to spot a condition or an illness before it can evolve into a larger issue or medical emergency.  

By nipping problems in the bud, you increase the likelihood of successful treatment. This, in turn, reduces your total healthcare costs.

Not Addressing Care Issues

Similarly, many Americans postpone receiving healthcare or avoid seeing their doctor because they don’t want to pay for the visit.

According to the Kaiser Family Foundation, almost 24% of uninsured people hesitate to seek needed healthcare due to the high cost of uninsured care. One study on trauma care and mortality among insured and uninsured adults who had suffered unexpected health shocks concluded that:

“Uninsured crash victims received 20% less care, particularly costly procedures and services, than did privately insured patients, and had a substantially higher mortality rate: 1.5 percentage points above the mean rate of 3.8%.”

Instead of addressing a health concern, you run the significant risk of it becoming worse over time. Like preventative care, taking steps to strengthen your health early on saves you in the long run. That’s why healthcare coverage is an absolute necessity for all individuals. 

Inability to Afford Medication

Many Americans rely on regular medication to treat chronic ailments. According to Bloomberg, 

“Americans spend more on prescription drugs—average costs are about $1,200 per person per year—than anyone else in the world. It’s true that they take a lot of pills. But what really sets the U.S. apart from most other countries is high prices. Cancer drugs in the U.S. routinely cost $10,000 a month.”

Like healthcare prices, the prices of prescription drugs have also increased. And although private insurers and the government subsidize a large portion of the bill, it’s still expensive. But without insurance, many Americans wouldn’t be able to afford the high drug costs.

A KFF survey found that uninsured people frequently decide not to get the treatment their provider recommends—primarily because of the costs. In 2019, 19.8% of adults under the age of 65 reported that they had delayed filling or simply didn’t re-up their prescription because of drug costs. 

What To Look for in a Healthcare Plan? 

The risks you run while being uninsured simply aren’t worth it. Health coverage isn’t just a luxury—it’s an essential service that can protect both your physical and financial health.

Wondering where to start when it comes to shopping for plans?

First, you should narrow down the type of health plan that best fits your needs. Questions you should ask yourself include: 

  • Are you healthy and fit? Do you regularly exercise and eat well? Do you have chronic health issues? Do you engage in risky activities? The type of insurance coverage you require will depend upon your age, health, and overall risk profile. 
  • How frequently do you go to the doctor? Are you a regular at the doctor’s office, or do you prefer to go once a year? If you’re regularly meeting with physicians, undergoing scans or tests, or need prescription medications, you may prefer a plan with lower copays and deductibles. 
  • What’s your financial situation? If you’re worried about finances, you may want a health plan with lower monthly premiums, which is meant mainly for infrequent or emergency visits. 
  • What are your current options? Can you access high-quality health insurance through your current employer? How about your parents? If you’re under 26, you can join their plan. The ACA is another option and provides subsidies for low-income individuals. 

By stepping back and taking stock of your health situation, you can start shopping for the ideal healthcare plan for you. 

Helping You Get Insured Affordably

The risks of being an uninsured person are high. Without an insurance plan, both your health and your bank account are put in jeopardy. But by protecting yourself, you can make sure that an unexpected accident won’t derail your life. 

If you’re self-employed and wondering about the costs associated with health insurance, check out this article: “How much is health insurance for the self-employed?” 

Sources:
KFF. Key Facts about the Uninsured Population. https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/

Healthcare.gov. Read the Affordable Care Act. https://www.healthcare.gov/where-can-i-read-the-affordable-care-act/

Congress.gov. Tax Cuts and Jobs Act. https://www.congress.gov/115/bills/hr1/BILLS-115hr1enr.pdf

HealthCareInsider. 5 States Are Restoring the Individual Mandate to Buy Health Insurance. https://healthcareinsider.com/states-with-individual-mandate-177178

KHN. The Cost Of Unwarranted ER Visits: $32 Billion A Year. https://khn.org/morning-breakout/the-cost-of-unwarranted-er-visits-32-billion-a-year/

Bankrate. Survey: Fewer than 4 in 10 Americans could pay a surprise $1,000 bill from savings. https://www.bankrate.com/banking/savings/financial-security-january-2021/#2

NCBI. Health Consequences of Uninsurance among Adults in the United States: Recent Evidence and Implications. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2881446/

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