Why You Still Absolutely Need Health Insurance Despite the Death of the Penalty

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Starting in 2019, you’ll no longer owe a fine to the IRS if you don’t have qualifying health insurance coverage. While the Affordable Care Act, or Obamacare, imposed a tax penalty for those who opted out of coverage, the mandate was eliminated with the tax reform law passed in late 2017.

While the end of the Obamacare mandate may seem like good news, the reality is that you should absolutely not forgo health insurance just because the government no longer penalizes you for not having it. Health insurance is one of the single most vital purchases you need to make, and you must ensure you’re covered despite the loss of the Obamacare penalty.

Not convinced you need coverage? Here are three big reasons you don’t want to go without a policy.

A male doctor talking to a male patient while writing on a clipboard..

Image source: Getty Images.

1. Medical care is extremely expensive — and you could go bankrupt if you get sick without coverage

Medical care in the United States comes at a high price, even for relatively minor injuries. Treating a broken leg could cost as much as $7,500, according to government sources, while staying in a hospital for three days would run you an average of $30,000. And if something really goes wrong — like you get cancer or need a heart transplant — you’re looking at hundreds of thousands of dollars for the care you need to stay alive.

With prices like these, it should come as no surprise that two-thirds of all bankruptcies are related to medical problems (although time off from work due to medical issues is also a contributing factor in medical bankruptcy, not just medical bills alone).

Thanks to the Affordable Care Act, insurance policies no longer have lifetime limits on coverage, and policies also cap the amount you can be made to spend on covered services. For 2019, the out-of-pocket maximum for a plan sold on the healthcare marketplace is $7,900 for individuals and $15,800 for a family plan. While this is a lot of money, it’s nowhere near what you might have to spend if you had no coverage at all. By limiting your losses, insurance policies significantly reduce the likelihood that a medical event will cause you to go broke or suffer serious long-term financial disaster.

2. You could end up delaying essential care if you don’t have insurance

According to a recent survey commissioned by AccessOne, 27% of U.S. households with children delay medical care because they can’t afford to pay for it. If you have no insurance and have to pay out of pocket for everything, there’s a good chance you’ll put off going to the doctor out of concern about how much a visit will cost you. And this could mean that you miss out on getting treatment for serious health issues. It could also mean a delay in diagnosing potentially life-threatening conditions, which will then make treatment more difficult and expensive.

For many conditions ranging from cancer to diabetes to heart disease, early detection saves lives and helps you to explore less invasive and less costly care. Also, health insurance policies are now required to cover preventative care and screening, even if your deductible hasn’t been met — when you’re covered, you’re much more likely to get diagnosed in a timely manner. You don’t want to miss out on getting the medical help you need, so you should have insurance that pays for you to visit the doctor.

3. You may have to wait a long time to get covered if you change your mind

While Obamacare doesn’t allow insurers to deny you coverage for pre-existing conditions, this doesn’t mean you can just wait until you’re sick and sign up for a health insurance policy right away. You can only get covered at certain times during the year, called open enrollment.

Open enrollment is over for 2019, so you can no longer get covered this year by an Obamacare plan unless you qualify to participate in a special enrollment period. If you want coverage in 2020, open enrollment runs from Nov. 1 to Dec. 15 this year. Once that deadline has passed, you’ll have to wait until the next November to get coverage unless you’ve had a qualifying life event — such as moving or getting a divorce. If you’re covered through an employer, you also have to sign up during your employer’s open enrollment period, which likely happens once a year.

Because most people generally have only a limited time each year to get covered, you can’t just change your mind if you realize you made a mistake by doing without health insurance. You need to make sure you’re continuously covered because you never know when something bad could happen.

Don’t forgo health insurance coverage

While the Obamacare mandate was intended to encourage healthy people to buy coverage, the threat of a penalty isn’t the only reason to get health insurance. You need insurance to avoid devastating financial disaster or serious and potentially life-threatening damage to your health. If you don’t have health insurance, you need to buy it ASAP. If you’re not sure how, check out this guide to getting covered. Having a policy in place will give you the peace of mind of knowing you can care for yourself and your family without going broke, so sign up for coverage at the next available chance — even though there’s no longer a mandate making you do so.

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