Jeffrey Wade
The cost of not having medical insurance varies depending on where you live and your personal circumstances. In the United States, the fee for not having health insurance, known as the Shared Responsibility Payment or mandate, was abolished in 2018. However, certain states may still require you to have health coverage, and you may be charged a fee when filing your state taxes if you do not have coverage or an exemption. Uninsured individuals often face unaffordable medical bills, as hospitals frequently charge higher rates to those without insurance. These unexpected costs can quickly lead to medical debt, especially for those with low or moderate incomes. To avoid unexpected charges, individuals without insurance can request a good faith estimate of expected charges from their healthcare provider before scheduling non-emergency care. This estimate can be used to dispute any bills that exceed the expected charges by at least $400. Understanding your rights and available resources is crucial when navigating the financial aspects of healthcare.
| Characteristics | Values |
|---|---|
| Fee for not having health insurance | The fee for not having health insurance, sometimes called the "Shared Responsibility Payment" or "mandate", ended in 2018. |
| Good faith estimate | If you don't have insurance or don't use it to pay for your care, providers must give you a good faith estimate of expected charges before providing services. You can dispute your bill if it exceeds the estimate by at least $400. |
| No Surprises Act | This act provides billing protections against unexpected out-of-network charges, but it doesn't cover ground ambulance services, vision-only, or dental-only insurance plans. |
| Uninsured rates | The uninsured rate for adults aged 19-64 decreased to 11.1% in 2023, while the share of children without insurance increased from 5.1% in 2022 to 5.3% in 2023. |
| Reasons for being uninsured | The high cost of insurance is the main reason cited by 63% of uninsured adults in 2023. Many lack access to coverage through their jobs, and some, especially in states that haven't expanded Medicaid, are ineligible for financial assistance. |
| State requirements | If you live in a state that requires health coverage and you don't have it, you may be charged a fee when filing state taxes. |
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What You'll Learn
No health insurance: 2024 federal tax return info
If you live in a state that requires you to have health coverage, not having coverage (or a qualified exemption) will result in a fee when you file your 2024 state taxes. This fee, sometimes called the "Shared Responsibility Payment" or "mandate", ended in 2018.
You must file a tax return if enrolled in a Health Insurance Marketplace® plan. The type of health coverage you had in 2024 will determine the details of filing your taxes. If you had no health coverage for all or most of 2024, you will need to get a voided Form 1095-A to include with your tax return.
If you had a Marketplace plan with a premium tax credit, you may owe taxes if you used more credit than you qualified for. You will need to report the excess amount on your 2024 tax return by filing Form 8962. If you used less than the amount of credit you qualified for, you may get a refund or lower the amount of tax you owe.
If you aren't using insurance to pay for your care, providers must give you a good faith estimate of the expected charges. This is a list of expected charges before you receive healthcare items or services. You can dispute a bill if it is at least $400 more than the estimate.
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Good faith estimates
The No Surprises Act, which came into effect on January 1, 2022, aims to provide patients with accurate information about their expected healthcare spending. The Act includes a mandate that Good Faith Estimates (GFEs) be provided to all uninsured or self-pay patients. This means that if you are uninsured or do not want to use your insurance, your healthcare provider is required to give you a GFE of expected charges if you request one or schedule services at least three business days in advance. This estimate should include expected charges for the scheduled healthcare items and services, including facility fees, hospital fees, and room and board provided by the provider or facility.
It is important to note that GFEs are not yet available for insured patients. However, insured patients can still request a good faith estimate of the amount they will be billed for non-emergency items and services. Additionally, when insured patients schedule certain non-emergency services with out-of-network providers, they may be asked to sign a notice and consent form, which will include an estimate of the likely cost of the out-of-network care. This is not the same as a GFE, but it can still provide valuable information about the expected costs.
In the future, it is possible that GFEs will be provided to all patients, regardless of their insurance status. This is known as "Phase 3" of the No Surprises Act, but the effective date has not yet been determined. In the meantime, most plans and issuers of group or individual health plans are now required to disclose their pricing models to the public, allowing consumers to make more informed decisions when choosing insurance.
If you are an uninsured or self-pay patient, it is important to know that you have the right to dispute charges that exceed your GFE by $400 or more. The dispute process is known as a Patient-Provider Dispute Resolution (PPDR) or Selected Dispute Resolution (SDR), and it allows you to challenge the bill and potentially reduce the amount owed.
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Understanding health insurance
Health insurance is a plan or policy that helps you pay for medical expenses, including doctor's visits, hospital bills, prescription medications, and other healthcare services. The primary purpose of health insurance is to protect you from the high costs of medical care and provide financial security in the event of illness, injury, or accidents. Not having health insurance can be a significant risk, as medical bills can quickly become overwhelming.
There are different types of health insurance plans available to meet diverse needs. Some common types include:
- Government plans: These include Affordable Care Act (ACA) plans, also known as Marketplace or Exchange plans, Medicare plans, and Medicaid plans.
- Metal categories: Health insurance plans are often categorized as Bronze, Silver, Gold, and Platinum. These categories indicate how costs are shared between you and your plan, but they do not reflect the quality of care.
- HMO plans: HMO stands for Health Maintenance Organization. These plans usually limit coverage to doctors and hospitals within their network or those with whom they have a contract. Out-of-network coverage may be available in emergencies or for an additional cost.
- POS plans: Point-of-Service (POS) plans offer more flexibility, allowing you to use a wider range of healthcare providers. However, you may need a referral from your primary care doctor to see a specialist.
When choosing a health insurance plan, it's important to consider various factors, such as deductibles, premiums, network restrictions, claims, and benefits. Understanding these terms can help you make an informed decision:
- Deductibles refer to the amount you pay out-of-pocket for covered healthcare services before your insurance plan starts paying. For example, with a $2,000 deductible, you would pay the first $2,000 of covered expenses yourself.
- Premiums are the monthly or periodic payments you make to your insurance company, regardless of whether you use medical services during that period.
- Network refers to the group of doctors, hospitals, and healthcare providers that have contracted with your insurance plan. Using in-network providers typically results in lower costs for you.
- Claims are requests sent to your insurance company for them to pay for a covered healthcare service.
- Benefits refer to the specific healthcare services and items covered by your insurance plan, such as hospital stays, doctor's visits, prescription drugs, mental health services, or preventive care.
It's worth noting that, as of 2018, there is no longer a tax penalty for not having health insurance at the federal level in the United States. However, certain states may have their own requirements and fees for individuals without health coverage. Understanding your state's regulations and your rights as a patient without insurance is crucial for avoiding unexpected charges and navigating the healthcare system effectively.
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Exemptions from the fee
The fee for not having health insurance, sometimes called the "Shared Responsibility Payment" or "mandate", ended in 2018. This means that you no longer pay a tax penalty for not having health coverage. If you don't have coverage, you don't need an exemption to avoid paying a penalty at tax time. However, if you live in a state that requires you to have health coverage and you don't have it, you may be charged a fee when you file your state taxes. For example, if you live in Maryland, you can visit Maryland Health Connection for information on exemptions, exemption forms, and how to apply.
There are two types of exemptions: affordability and hardship. Affordability exemptions apply if the lowest-priced coverage available to you through either a marketplace or job-based plan would cost more than 7.97% of your household income. Hardship exemptions cover a range of circumstances, including financial hardship, that prevent you from obtaining health insurance. For example, you may qualify for a hardship exemption if you were homeless, faced eviction or foreclosure, experienced domestic violence, or had large unpaid medical bills. Hardship exemptions usually cover the month before the hardship, the months of the hardship, and the month after the hardship. In some cases, exemptions may be granted for additional months, up to a full calendar year.
If you need to apply for an exemption, you must provide all the required information and acceptable proof for you and your tax household. You can submit your application online, by fax, or by mail. Once you have submitted a complete exemption application, the relevant authority has up to 30 calendar days to determine whether you qualify. If you disagree with the decision about your eligibility for an exemption, you can file an appeal or a complaint within 90 days of the date of your exemption notice.
It is important to note that if you don't have health insurance, providers must give you a good faith estimate of how much your care will cost if you schedule care at least three business days in advance or if you request an estimate. A good faith estimate is a list of expected charges before you receive healthcare items or services. You can use this estimate to dispute your bill if it is at least $400 more than the estimate.
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Options for affordable care
If you live in a state that requires you to have health coverage, you won't have to pay a tax penalty for not having health coverage, but you may be charged a fee when filing your state taxes.
Marketplace Plans
Marketplace plans may be more affordable than you think. Most people qualify for savings, which are based on your income and household size. You can apply to see if you qualify for savings on a Marketplace plan, Medicaid, or CHIP. If you don't qualify, you can still purchase a Marketplace plan, and you may be able to lower your costs with a premium tax credit.
COBRA Continuation Coverage
If you lost your job, you may be eligible for COBRA (Consolidated Omnibus Budget Reconciliation Act) continuation coverage if your former employer offers it.
Community Health Centers
If you cannot afford a Marketplace plan, you can find low-cost health care at a nearby community health center.
Good Faith Estimate
If you don't have insurance, your healthcare provider must give you a good faith estimate of how much your care will cost if you schedule care at least three business days in advance or if you ask for one. You can use this estimate to dispute your bill if it is at least $400 more than the estimate.
It's important to note that you won't get an estimate during emergency care, and the good faith estimate is not a bill.
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Frequently asked questions
The fee for not having health insurance ended in 2018, so you no longer pay a tax penalty for not having health coverage. However, if you live in a state that requires you to have health coverage, you may be charged a fee when you file your state taxes. You may qualify for an exemption to avoid the penalty, and most exemptions may be claimed on your state income tax return.
A good faith estimate is a list of expected charges that you receive from a provider or facility before getting health care items or services. You are eligible to get a good faith estimate if you schedule care at least 3 business days in advance or if you ask for one. This estimate is not a bill, and you can use it to dispute your bill if it is at least $400 more than the estimate.
If you don't have insurance, you are usually less likely to access care and more likely to delay or forgo it due to costs. Uninsured individuals often face unaffordable medical bills, which can quickly lead to medical debt. Hospitals frequently charge uninsured patients higher rates than those paid by private health insurers. However, you have the right to receive a good faith estimate of expected charges and to dispute your bill if it exceeds the estimate.
Many people are uninsured due to the high cost of insurance, a lack of access to coverage through their job, and ineligibility for financial assistance. Despite these reasons, over half of uninsured people may be eligible for Medicaid or subsidized coverage but may face barriers to enrolling or lack awareness of these options. Additionally, gains in Medicaid and Marketplace coverage during the pandemic have since declined, with states resuming disenrollment from Medicaid.
