The Consequences of Cancelling Health Insurance: Do You Face a Penalty?
Health insurance is one of the most important investments you can make for both your physical and financial health. However, circumstances can arise that may cause you to consider cancelling your policy. While this may seem like a viable option at the time, it can lead to serious consequences down the road that may end up costing you more in the long run. In this article, we will take a closer look at the consequences of cancelling your health insurance and whether or not you may face a penalty for doing so.
Why Do People Cancel Their Health Insurance?
There are several reasons why someone may decide to cancel their health insurance policy. One of the most common reasons is a change in employment status. If you lose your job, you may also lose your health insurance benefits. In these cases, some people may choose to forgo health insurance altogether if they believe they can’t afford it on their own.
Another reason why people may cancel their health insurance is due to financial difficulties. Paying for health insurance can be costly, and some individuals may decide to cancel their policy if they feel they can’t afford it. These decisions may seem logical at the time, however, it can lead to a number of unforeseen consequences down the line.
Consequences of Cancelling Health Insurance
One of the most significant consequences of cancelling your health insurance policy is that you may be left without coverage if an unexpected medical emergency arises. Medical emergencies can happen at any time, and without adequate coverage, you could end up being responsible for the entire cost of your medical bills.
Another consequence of cancelling health insurance is that you may be subject to a penalty. In 2019, the penalty for not having health insurance was either 2.5% of your income or $695 per adult and $347.50 per child, per year, whichever was more. While this penalty has been eliminated starting in 2019, it’s important to note that it may be reinstated at a later date, so it’s essential to keep up with the latest healthcare news and policies.
If you do end up needing medical treatment after cancelling your health insurance, you will be entirely responsible for any costs that may arise. These costs can add up quickly and may end up being far greater than what you would have paid in premiums for your health insurance policy.
Alternatives to Cancelling Health Insurance
If you’re facing financial difficulties or job loss and are considering cancelling your health insurance policy, there are alternative options to explore before taking that drastic step. For example, many health insurance providers offer payment plans and subsidies for those who may be experiencing financial hardship. There are also government-funded programs such as Medicaid and Medicare that may offer health coverage for those who are eligible.
It’s important to remember that the consequences of cancelling your health insurance may be more severe than the inconvenience of paying monthly premiums. Before making any decisions, be sure to weigh all your options and consider the possible long-term consequences.
Conclusion
The consequences of cancelling your health insurance should not be taken lightly. While it may be a tempting decision in the short term, the potential long-term consequences can be dire. Anyone considering cancelling their health insurance policy should explore alternative options and seek the advice of a healthcare professional before making any decisions.
