Jane Dotson
If you want to drop your medical insurance from the marketplace, there are a few things you should know. Firstly, you can cancel your plan at any time of the year, but it must be done at least 14 days before you want your coverage to end. You can do this online or over the phone. It's important to note that simply stopping payments will not immediately terminate your coverage, and you may be pursued for non-payment. Additionally, if you are the only person on your plan, you can choose the termination date, but if there are multiple people, the coverage will likely end immediately for those who want to cancel. It is also advised that you do not cancel your current plan until you know when your new coverage starts to avoid a gap in coverage.
| Characteristics | Values |
|---|---|
| When to drop medical insurance | Any time throughout the year, but at least 14 days before the desired end date of coverage |
| How to drop medical insurance | Online or on the phone |
| Who to contact | The Marketplace center, not the insurance provider |
| Who is eligible for medical insurance | U.S. citizens, U.S. nationals, or lawfully present immigrants; those who are not incarcerated; those who are uninsured, generally not eligible for Medicaid or Medicare, and do not have affordable employer-based coverage |
| What to do before dropping medical insurance | Report income and household changes, as they may impact coverage and cost savings |
| What to consider before dropping medical insurance | The health and financial benefits of having health coverage, as medical care without insurance can be expensive |
| What to do if you get a job with health insurance | Cancel Marketplace coverage, as you will no longer be eligible for any subsidies |
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What You'll Learn
Cancelling your Marketplace plan online or over the phone
You can cancel your Marketplace plan online or on the phone. If you are the only person on your Marketplace health plan and you want to cancel your coverage, you can do so online. However, if your plan covers multiple people, you can cancel by calling the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325). This phone line is available 24 hours a day, 7 days a week.
Before you cancel your Marketplace plan, there are some important things to keep in mind. Firstly, don't end your plan until you know for sure when your new coverage starts to avoid a gap in coverage. Once you end your Marketplace coverage, you can't re-enroll until the next Open Enrollment Period unless you qualify for a Special Enrollment Period.
You qualify for a Special Enrollment Period if you've had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child, or if your household income is below a certain amount. You can also qualify for a Special Enrollment Period if you lose eligibility for Medicare, Medicaid, or the Children's Health Insurance Program (CHIP), or if you turn 26 and lose coverage from a parent's health insurance plan.
Additionally, when deciding whether to cancel your Marketplace plan, consider the health and financial benefits of having health coverage. Medical care without insurance can be very expensive, and health coverage helps you access regular care, including free preventive services, to keep you healthy.
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Reasons for ending your Marketplace insurance plan
There are several reasons why you may want or need to end your Marketplace insurance plan. Here are some common reasons:
- Obtaining Other Health Coverage: One of the most common reasons for ending a Marketplace insurance plan is when you gain access to other health coverage. This could include getting a job that offers health benefits, becoming eligible for Medicare or Medicaid, or finding a different plan that better suits your needs.
- Life Changes: Significant life changes, also known as "Qualifying Life Events," can impact your insurance needs and eligibility. These events include getting married, getting divorced, having a baby, adopting a child, experiencing the death of the insured family member, or turning 26 and aging out of a parent's health insurance plan.
- Relocation: Moving to a different ZIP code, county, or state can also be a reason to end your current Marketplace insurance plan. Insurance plans and rates can vary by geographic location, so moving may prompt you to explore other options.
- Financial Considerations: Financial circumstances can play a role in your decision to end a Marketplace plan. You may find that the monthly premiums and out-of-pocket costs associated with your current plan are no longer affordable. In such cases, you may want to consider alternative plans with lower premiums or explore options for financial assistance.
- Change in Health Status: Your health status may change, and you may find that your current Marketplace plan no longer aligns with your healthcare needs. For example, if your health improves and you don't anticipate regular medical services or prescriptions, you might opt for a lower-cost plan with higher deductibles. Alternatively, if your health needs become more complex, you may seek a plan with more comprehensive coverage.
- Plan Availability: At times, the specific Marketplace plan you're enrolled in may no longer be available or may undergo significant changes. In such cases, ending your current plan and exploring alternative options becomes necessary.
Remember, ending your Marketplace insurance plan can have consequences. Once you cancel your coverage, you might have to wait for the next Open Enrollment Period to enroll again, potentially leaving you with a gap in coverage. It's important to carefully consider your options and understand the implications before making any decisions.
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Qualifying Life Events (QLEs)
Certain changes in your circumstances are known as "Qualifying Life Events" (QLEs). QLEs are changes in your life situation that may impact your current health insurance coverage and make it necessary to enroll in a new plan or drop your existing one. These events typically qualify you for a Special Enrollment Period (SEP), allowing you to make changes to your health insurance plan outside of the yearly Open Enrollment Period.
- Loss of health coverage: Losing your health insurance plan due to job loss or a change in eligibility is a qualifying life event. This includes losing employer-based insurance or no longer qualifying for programs like Medicaid, Medicare, or the Children's Health Insurance Program (CHIP).
- Changes in family composition: Events such as getting married, getting divorced, having a baby, or adopting a child can qualify you for a Special Enrollment Period.
- Moving to a different location: Moving to a new ZIP code, county, or state can impact your health insurance options and may qualify you for an SEP. This includes moving to the U.S. from a foreign country or a U.S. territory.
- Age-related changes: Turning 26 and aging out of a parent's health insurance plan is considered a qualifying life event.
- Death of the insured: The death of the primary insurer in the family can be a qualifying life event, leading to changes in coverage for the rest of the family members.
It's important to note that the requirements for qualifying life events may vary slightly depending on your state and specific insurance marketplace. If you believe you have experienced a qualifying life event, it is recommended to contact your insurer or the Marketplace to understand your options and the documentation required for eligibility.
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Maintaining health coverage to avoid gaps
Gaps in health insurance coverage can have several negative consequences. Not only can it cause significant stress due to the uncertainty of affording medical care, but it can also lead to long-term negative health impacts as individuals may lose access to necessary medical professionals, treatments, and prescriptions at reasonable prices. Moreover, having a gap in health insurance coverage may affect one's eligibility for future insurance policies, as insurers may consider an individual's recent insurance history when determining coverage options and premiums.
To avoid these challenges, it is important to maintain consistent health insurance coverage. Here are some ways to ensure you have continuous health coverage:
Understand Qualifying Life Events (QLEs)
Certain life changes, known as "Qualifying Life Events" (QLEs), can trigger a Special Enrollment Period, allowing you to enroll in a new healthcare plan outside of the regular open enrollment period. These events include getting married or divorced, having or adopting a child, experiencing the death of the insurer in the family, losing health insurance due to job loss, losing eligibility for Medicare or Medicaid, turning 26 and aging out of a parent's health plan, and moving to a different location. Keep in mind that you may need to provide verification for these life events when applying for a new plan.
Enroll in a Marketplace Plan through a Special Enrollment Period
If you experience a qualifying life event, such as job loss, you may be eligible to enroll in a Marketplace plan through a Special Enrollment Period. This allows you to sign up for a new healthcare plan outside of the regular open enrollment window. With a Special Enrollment Period, you can apply for a new plan within 60 days of losing your previous coverage. Marketplace plans may also offer savings through premium tax credits, and you can explore eligibility for Medicaid or CHIP.
Consider COBRA Coverage
COBRA coverage is another option to maintain health insurance coverage. If you lose your job, COBRA allows you to keep your job-based health plan for up to 18 months. However, you will be responsible for paying the full premium plus a small administrative fee.
Explore Options for Low-Cost or Free Coverage
If affordability is a concern, you can explore options for low-cost or free coverage. For example, you can apply for Medicaid or FAMIS, which offer free or low-cost coverage. These programs are available throughout the year, and you can determine your eligibility through the Marketplace. Financial assistance may also be available to help lower your premium and other costs.
Maintain Continuous Coverage during Transitions
When transitioning between health insurance policies, try to avoid gaps in coverage. Even if you are switching between plans, ensure that your new coverage starts as soon as your previous coverage ends. This will help you maintain consistent protection and avoid any breaks in coverage that could impact your future insurance options.
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Nonpayment as a method of termination
If you do not pay your premiums, your insurance provider may drop your coverage. This is because the insurance company, not the marketplace, receives your payments. However, this method of termination is not recommended as it may have negative consequences, such as a lapse in coverage and difficulty in finding new insurance.
When you buy insurance through the Marketplace, you are entering into a contract with an insurance company, not the Marketplace itself. This means that the insurance company is the one that receives your premium payments and is responsible for managing your coverage. If you do not pay your premiums, the insurance company may choose to terminate your coverage.
It is important to note that each insurance company will have its own policies and procedures for handling nonpayment. Some companies may offer a grace period or work with you to find alternative payment arrangements. Others may be less flexible and immediately terminate your coverage if you miss a payment.
It is always best to review your insurance policy and understand the company's policies on nonpayment before choosing this method of termination. Additionally, keep in mind that if your coverage is terminated due to nonpayment, you may have difficulty finding new insurance. You may also experience a lapse in coverage, which could leave you vulnerable to unexpected medical expenses.
Therefore, while nonpayment is a possible method of terminating your medical insurance, it is not recommended. Instead, it is advisable to review your options for ending your Marketplace plan, such as qualifying life events or enrolling in alternative coverage. By proactively managing your coverage, you can ensure that you maintain continuous protection from unexpected medical expenses.
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Frequently asked questions
You can cancel your Marketplace plan either online or on the phone. If you are the only person on your Marketplace plan, you can choose when to end the coverage. If there are two or more people on your plan, you can cancel coverage for just yourself.
You can cancel your plan at any time throughout the year, but you need to cancel your Marketplace health plan at least 14 days before you want your coverage to end. It is important to note that enrolling in Medicare does not cancel your Marketplace plan.
Nonpayment will eventually cause your coverage to end, but your insurer might still try to collect from you if they think you just got behind on your premium payments.
Once you cancel your coverage, you might have to wait for the next Open Enrollment Period to enroll again. There are significant health and financial benefits to having health coverage, and medical care without insurance can be very expensive.
