Consequences of No Health Insurance

WhatsNext“Do I really have to … ?”

I must have said that at least 100 times growing up. Do I really have to go to bed? Do I really have to wash the dishes? Do I really have to wear braces? (That last one was the most dramatic as a 7th-grader several decades back.)

Right now, there is a new question you need to answer. This one is “Do I really have to buy health insurance?”

The simple answer is no, you don’t, but there are consequences if you do not buy health insurance.

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Consequence One: The Penalty

If you don’t have health insurance by March 31 and you don’t have an exemption, you will have to pay a penalty for not having health insurance.

The penalty will be the greater of 1 percent of taxable income or $95 per adult and $47.50 per child (up to $285 per family). This will go up the next two years.

So, if I am a single, 27-year-old electrician with an annual income of $40,000 in 2014, I will pay a penalty of $400 on my 2015 taxes for not carrying health insurance.

Consequence Two: Health Care Expenses

If you don’t buy insurance, you will be responsible for all of your health care costs during the year. Think you won’t need health care because you are healthy? Okay, tell that to my niece after a lawnmower ran over her toe this past summer or to the couple who found out they were expecting their first child together in May. Surprises, good and bad, happen.

If you choose not to get health insurance, you won’t have help paying for those expenses when you need it. You may think that you can call on your way to the emergency room or buy it after you fall off the roof and the health insurance will go back and cover the costs of that emergency room visit. I will be the bearer of bad news here because that will not happen. Coverage has an effective date on it, meaning you can’t claim an injury or illness that happened before that date. Here is a short video to explain when you can get coverage next if you miss the deadline.

Take care of yourself and get covered.

By Deb Muller

Chief Administrative Officer at Avera Health Plans