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Can't Afford Health Insurance
12 Jan 2020

What Should You Do if You Can’t Afford Health Insurance?

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There are 44 million Americans without health insurance.

Not having health insurance means not knowing what will happen in the event of an unexpected injury or illness. It leads people to avoid preventative care for fear they can’t afford it. But this is a reality for millions of Americans.

If you’re one of the millions that can’t afford health insurance, there are options out there for you. From reducing your income to qualify for subsidies to simply taking better care of your general health, taking these steps gives you more security in terms of your health.

If you’re wondering what to do if you can’t afford health insurance, don’t panic – check out these helpful tips.

1. Weigh the Pros and Cons of Paying the Penalties

The Affordable Care Act places a penalty on people who can afford health insurance but choose not to buy it. This is called the Individual Mandate Penalty.

For plans through 2018, the penalty can be $695 per year or up to 2.5% of your income. Although the future of the Affordable Care Act is currently in the hands of Congressional Republicans, for now, that penalty remains in place.

Considering that many health insurance plans will cost upwards of $5000 per year just in premiums, paying the penalty is far more affordable when you’re already having trouble paying the bills. For someone who doesn’t regularly visit the doctor, that’s even truer.

However, it can be dangerous to go without health insurance, even if you’re not currently using it very much. If you have to visit the doctor for an unexpected injury or illness, you could incur thousands of dollars in medical fees. Without insurance, you’ll have no way of covering those medical bills.

2. Look Into Your Income

People who can’t afford health insurance have options on the Obamacare state marketplaces. And if your income is between 100% and 400% of the federal poverty line, you’re eligible for tax credits. These credits can help you pay monthly premiums and, in some cases, cover out-of-pocket expenses such as copayments and even deductibles.

The federal poverty level is $11,700 to $47,080 for an individual. For a family, that’s between $24,250 or $97,000 per year. If you’re close to the cutoff but not quite there, there may be a way to lower your income for qualification.

For example, self-employed individuals may be able to adjust their income with business expense deductions and investments in the business. Contributing to an individual retirement account (IRP) or a simplified employee pension (SEP) are other ways to lower your income.

3. Deduct Premiums

People who don’t have employer-sponsored health insurance plans can do something that those with employer plans can’t. That is, you can deduct the full amount you’ve paid toward health insurance premiums from your annual taxes.

And, in the case you have higher health care costs than average, there’s also a deduction available to you. If you’re spending at least 10% of your total income on healthcare, you qualify for the medical expenses deduction. This allows you to deduct your high healthcare costs from your taxes as well.

4. Shop Around

People forget that they can shop around for medical care as much as they can shop around for other items. Don’t be afraid to call different clinics, doctors, and hospitals to find out how much their care costs – when you have the luxury of time on your hands. There are also free clinics at your disposable should you qualify to use them.

If you do have health insurance, but healthcare costs are still too much to take on, you can contact your provider for information on the most affordable services in your network. In some cases, going outside of your network might actually be more economical.

5. Join a Group

Even if you don’t have access to an employee-sponsored program, you might have access to other health insurance programs that you’re unaware of. Various organizations offer some form of health insurance and when you’re struggling to pay for healthcare, every little bit counts.

Look into professional associations, trade groups, and also alumni groups to see what they might offer. Many of these work as pools wherein many members are pooled together. In these plans, the volume of members qualifies the organization for premiums at a group rate that might be at your pricepoint.

If you’re self-employed, there are special options available to you in terms of group health insurance. These include the National Association for the Self Employed and the Alliance for Affordable Services. The members forming these pools include business owners and entrepreneurs.

6. Stay Healthy

This one might seem obvious but, staying healthy can help you avoid illnesses and injuries. Eating well and exercising regularly improve your long term physical health.

Without both of these necessary items, you are more susceptible to cardiovascular disease, diabetes, neurological disorders, muscle atrophy, infection, and a list of other complications. And more health complications mean more visits to the doctor and medical procedures that increase your premiums and health care costs.

The other part of staying healthy is preventative care. While it’s too often the case that people who can’t afford health insurance avoid visiting the doctor, regular check-ups allow you to catch little problems before they become bigger ones.

Other Options When You Can’t Afford Health Insurance

When you’re healthy and you can’t afford health insurance, you might consider paying the penalty instead of much more expensive monthly premiums. But if something were to happen and you had to cover medical expenses out of your own pocket, you’d be putting yourself in a very bad financial position.

If you’re having trouble paying for health insurance, consider your other options. These include joining a group medical plan, lowering your deductible, or exploring your options for credits. If none of these are right for you, you’ll find more helpful financial information in our learning center.