Jane Dotson
Health insurance is important for reducing the risk of medical debt and ensuring access to affordable healthcare. While there is no federal penalty for lacking health insurance, five states and Washington, D.C., require residents to have coverage, with penalties for non-compliance. Even with these penalties, 8% of Americans, or 26 million people, were uninsured in 2022. The main risks of going uninsured are financial, with individuals potentially facing higher charges for care and struggling to manage the cost of medical emergencies. Uninsured people may also face restricted access to primary care providers, leading to a greater likelihood of delaying or forgoing needed care.
| Characteristics | Values |
|---|---|
| Percentage of the US population with health insurance | 92% |
| Number of Americans without health insurance in 2022 | 26 million |
| Percentage of uninsured adults who did not see a doctor in the past year | 46.6% |
| Percentage of insured adults with private insurance who did not see a doctor in the past year | 15.6% |
| Percentage of insured adults with public coverage who did not see a doctor in the past year | 14.2% |
| Percentage of uninsured adults who did not see a doctor due to cost | 22.6% |
| Percentage of insured adults with private coverage who did not see a doctor due to cost | 5.1% |
| Percentage of insured adults with public coverage who did not see a doctor due to cost | 7.7% |
| Number of states that require residents to have health insurance coverage | 5 |
| District that requires residents to have health insurance coverage | Washington D.C. |
| Number of states that enforce financial penalties for not having health insurance | 8 |
| Average medical or dental debt for more than 8 out of 10 adults | $500 |
| Percentage of adults with at least $5,000 in medical or dental debt | 22% |
| Percentage of people who were uninsured in 2023 and have been without coverage for more than a year | 64% |
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What You'll Learn
The financial risks of going uninsured
While there is no federal tax penalty for lacking health insurance, there are significant financial risks associated with going uninsured. Nearly two-thirds of uninsured people in 2023 have been without coverage for over a year, and the primary reason for this is the cost of coverage. However, this means that they are exposed to the full cost of any healthcare they might need.
Without insurance, you may be charged more for care, as the cost is not subsidised by an insurance company. This can result in large medical debts, which can accumulate quickly and affect other aspects of your finances. Over half of medical debt comes from hospital care, and a further 37% from doctor visits. You may also find it difficult to access primary care providers, and be forced to rely on emergency rooms for treatment, which is both costly and strains emergency services.
In addition, without insurance, you may be unable to afford preventative care, such as screenings, check-ups, and vaccines. This can lead to undetected conditions and missed opportunities for early intervention, potentially allowing manageable health issues to escalate. Access to specialists may also be limited, making it difficult to manage complex or chronic conditions.
While there are affordable ways to get health insurance, such as being added to a spouse's plan or getting a subsidised plan, it is important to carefully review your health insurance plan to understand what it covers and what it doesn't. If you are unable to afford coverage, there are still ways to protect your health and finances, such as opening a Health Savings Account (HSA) to reduce your out-of-pocket healthcare costs. However, these measures are not a substitute for comprehensive health coverage.
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The impact on your access to primary care
Without insurance, you may find your access to primary care providers restricted. Uninsured people often face unaffordable medical bills when they seek care, and nearly half of uninsured adults say they have difficulty affording health care costs. This can quickly translate into medical debt, and many uninsured people face the challenge of seeking medical care in the first place. Uninsured adults are far more likely than their insured counterparts to postpone or forgo healthcare due to concerns over costs. This can have severe consequences, particularly when preventable conditions or chronic diseases go undetected.
However, there are resources available to help you find and pay for medical care without insurance. In the US, hospital emergency rooms are required to provide treatment regardless of insurance or ability to pay. There are also many medical facilities that provide routine care to people without insurance. You will be asked to pay for any care you receive, but there are ways to find healthcare at a lower cost. For example, community health centres are non-profit clinics that offer low-cost or free care, with fees set on an income-based sliding scale. Some states also provide "charity care", which is medical care that is free or has reduced rates for people who meet income requirements.
In addition, doctors, clinics, and hospitals may offer reduced fees to uninsured people, and you can also ask for generic medication, which is usually less expensive than branded medication. Pharmacies, including those inside major national chains, often provide preventative care services for free. If you have a teaching hospital in your area, you might be able to receive care at a reduced rate.
It is important to remember that taking advantage of primary care services can keep you healthy and your bills lower in the long run. For example, if your primary care physician can detect a chronic condition early, you can save money on expensive medical treatments in the future.
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Exemptions and penalties for not being insured
While there is no longer a federal penalty for lacking health insurance, some states have their own mandates and penalties. These include New Jersey, DC, Massachusetts, California, and Rhode Island. Vermont enacted a mandate in 2020 but removed the penalty for non-compliance. Maryland also removed the mandate penalty from a 2019 bill.
If you live in a state that still enforces a penalty, you can apply for an exemption in certain circumstances. Hardship exemptions cover situations such as homelessness, eviction, utility shut-off, domestic violence, the death of a family member, natural disasters, bankruptcy, unaffordable medical expenses, and unexpected increases in necessary expenses due to caring for a family member. If you are under 21 and eligible for an exemption due to religious conscience, you will need to reapply when you turn 21.
Even if you are uninsured and do not face a penalty, there are risks associated with lacking health insurance. Uninsured individuals are more likely to forgo needed care, and when they do receive care, they may be charged more for it. This can lead to overwhelming medical debt. Uninsured individuals may also have restricted access to primary care providers, preventive services, and specialists, potentially allowing manageable health issues to escalate.
While it is not always accessible to everyone, health insurance is important for managing healthcare costs. If you are without coverage, there are strategies and resources to help safeguard your well-being, such as opening a Health Savings Account (HSA) to take advantage of tax benefits and reduce your out-of-pocket healthcare costs.
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Affordable ways to get insured
While there is no federal tax penalty for lacking health insurance, there are significant risks associated with being uninsured. These risks are primarily cost-related, as uninsured individuals must pay out-of-pocket for healthcare services, which can quickly lead to overwhelming medical debt. Uninsured individuals may also face restricted access to primary care providers, potentially causing manageable health issues to escalate and resulting in higher healthcare costs. Therefore, it is in most people's best interest to obtain health insurance to help cover healthcare costs and reduce the risk of medical debt. Here are some affordable ways to get insured:
Affordable Care Act (ACA) Marketplace
The ACA's Health Insurance Marketplace offers a range of affordable health insurance options, including subsidized plans. There is no income limit to be eligible to enroll, and insurers cannot refuse coverage based on sex or pre-existing conditions. The amount you pay for insurance through the ACA may depend on factors such as your income and household size. To get started, visit Healthcare.gov to find your state's Health Insurance Marketplace and follow their enrollment instructions.
Medicaid
Medicaid provides health insurance coverage for adults and children with low incomes, and in some states, it also covers adults who meet certain eligibility criteria. Medicaid expansion has been associated with improved health outcomes, including increased early-stage cancer diagnosis rates, lower cardiovascular mortality, and improved substance use disorder recovery.
Spouse's Health Plan
If your spouse has health insurance, you may be able to be added to their health plan, providing you with insurance coverage.
Employer-Sponsored Coverage
A majority of working-age adults in the US obtain health insurance through their employer. If you are employed, check with your employer to see if they offer health insurance benefits and if you are eligible to enroll.
Health Savings Accounts (HSAs)
While not a substitute for comprehensive health insurance coverage, HSAs can be a valuable tool for managing healthcare expenses. HSAs are typically intended for short-term healthcare costs but can also be used to save for medical expenses in retirement. If you have a high-deductible health plan, consider opening an HSA to reduce your out-of-pocket costs.
Remember, while these options can provide more affordable ways to obtain health insurance, the best choice for you will depend on your individual circumstances, such as your income, family situation, and health status.
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The risks of medical debt
While there may be no federal tax penalty for going without health insurance, there are still risks associated with being uninsured. The risks of going uninsured are primarily cost-related, and medical debt is a widespread issue in the United States, affecting both uninsured and insured adults.
Medical debt can happen to almost anyone in the United States, but it is most pronounced among people who are already struggling with poor health, financial insecurity, or both. People who are very ill or living with a disability are also at risk of losing their employment or income due to illness. A KFF survey found that people with unaffordable medical bills are more likely to delay or skip needed care to avoid incurring more medical debt, cut back on other basic household expenses, take money out of retirement or college savings, or increase credit card debt.
People with medical debt are also more likely to experience other forms of financial distress, such as taking on additional debt, spending down their savings, or borrowing money from friends or family. In addition, medical debt can affect an individual's housing and food security, with people reporting that they are unable to pay their rent or mortgage, losing access to utilities, or facing eviction or foreclosure.
Without health insurance, individuals may be charged much more for care that would otherwise be covered by their plan. This is because no one is subsidizing their cost of care, and they may have to pay higher charges for the same services. They will have to pay for everything out of pocket, and if they cannot afford the cost of care, the hospital or medical practice could take legal action against them. As a result, they may find themselves quickly drowning in medical debt.
Even a relatively small unexpected medical expense can be unaffordable for people with limited assets, and medical debt may build up over time for those with significant medical needs. For example, people living with cancer have been found to have higher levels of debt than those who have never had cancer. High deductibles and other forms of cost-sharing can also contribute to individuals receiving medical bills that they are unable to pay, despite having insurance.
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Frequently asked questions
No, it is not mandatory to have medical insurance at the federal level in the US. However, California, Massachusetts, Rhode Island, New Jersey, Vermont, and the District of Columbia require eligible residents to declare annual proof of health insurance coverage on state taxes.
The risks of going uninsured are primarily cost-related. Without insurance, you may be charged more for care, and you will have to pay for everything out of pocket. This can lead to large amounts of medical debt, which can affect other aspects of your finances.
As of 2022, more than 92% of the US population has health insurance, leaving around 8% (approximately 26 million people) uninsured.
The main reason people go without medical insurance is that they cannot afford the cost of coverage.
Alternatives to traditional insurance include being added to a spouse's health plan, obtaining a subsidized plan through the Affordable Care Act (ACA), or applying for Medicaid if eligible.
