The Intricacies of Health Protection in the US: Is It Legal to Not Have Health Insurance in 2021?

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Date: Mar 04, 2021. Author: Victoria Berezhetska

Health insurance supports policyholders and allows them to afford protection from health-related risks and various injuries. 

When you purchase a healthcare plan, you expect to get the most out of it, especially if you have medical problems. That is why statistically, people with health issues tend to buy policies more often. 

Does it mean that the majority of Americans are in good health and do not need any coverage? Or do they choose to be uninsured? In the second half of 2019, 35.7 million adults under the age of 65 were uninsured. It might look like a disaster for the health insurance industry, except that it doesn’t, taking into account the total population. 

Is Not Having Health Insurance Risky?

Before the ACA individual mandate, applicants with prior medical conditions who might require expensive treatment could be denied health coverage by the providers. The introduction of ACA solved this issue by making health insurance mandatory and supporting applicants with chronic illnesses. 

And while it did resolve the problem, failure to maintain the minimum insurance required by individual health insurance mandates could cause tax penalties. In 2019, the individual mandate was canceled at the governmental level. So, is there a penalty for no insurance today?

The answer is no. You do not have to pay financial penalties for not being insured after January 1, 2019. Despite that, there are states that still require health insurance. And if you live in New Jersey, Vermont, California, District of Columbia, Massachusetts, or Rhode Island, you have to take out insurance. If you haven’t done it yet, you should look for a reasonably priced health plan and understand how it works.

Unfortunately, penalties can still apply if you have not been insured before the repeal took place. In other words, if you had no healthcare plan, had no tax exemption certificate, and did not meet the demands of the hardship exemption, you will have to deal with the fines associated with that period.

What Are the Disadvantages?

The cancelation means that there is no need to spend extra money on premium payments. But there is still a significant downside to not having to take out insurance. 

Self-pay patients often have to deal with expensive procedures and substantial bills. It might become a massive problem if you have no extra resources or a decent monthly salary. 

The pre-insurance cost of any ER or ED visit ranges from $600 to more than $3000. And while paying out of pocket for any treatment might be manageable with regular earnings, there is always a chance of major financial trouble, an unexpected accident, or illness.

Is It Possible to Avoid the Individual Mandate Tax?

As previously mentioned, if you had any issues while coverage was still mandatory, you will have to deal with all the penalties. If you want to make sure that you will not have to pay any penalties or face a financial strain in the future, do yourself a favor and consider enrolling in a health insurance plan.

To make sure you get to purchase a suitable policy, analyze the available options and check the registration period dates. With the pandemic going on, some of the periods have been prolonged. That is why you might find a way to enroll even today. 

Naturally, your economic welfare and health should be your top priority. That is why it would be a wise decision to explore the options and consider your choices. Depending on the state you live in, you can weigh all the pros and cons to see whether it is safe for you to go uninsured and, hopefully, unpunished.

Victoria Berezhetska

The content writer that covers insurance industries.

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