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What Happens if You Don't Have Health Insurance in 2018?

What Happens if You Don't Have Health Insurance in 2018?

Posted Dec 29, 2017 by Jenifer Dorsey

First off, you may still have time to enroll in an Obamacare or individual health insurance plan if you live in one of the states that has extended their open enrollment period[1]:

Don’t live in one of these states?

The next step is to consider if you:

If none of those options are available to you, you may still qualify for an exemption to avoid the tax penalty.

Do you qualify for an ACA exemption?

If you answered “yes”

If you qualify for exemptions you will not owe the tax penalty for going without minimum essential coverage.

Some examples of exemption-eligible circumstances include[2]:

  • Having a gross or household income below the minimum threshold for filing a tax return
  • Experiencing general hardship due to circumstances such as homelessness, foreclosure, death of a close family member, unpaid medical bills and more
  • Being a resident of a state that did not expand Medicaid

Some Obamacare exemptions must be claimed or reported when you file your taxes. Others are automatic. More exemption information is available at IRS.gov. Learn about all of the ACA exemptions.

While being exempted from the financial burden of participating in the ACA may feel like a relief, remember, it just means you’re not going to be held financially responsible via Obamacare - remaining uninsured still opens you up to the risk of having to pay hefty medical bills out of pocket in the event you need to access health care.

The good news is there’s an affordable, convenient alternative health insurance option called a  “fixed indemnity” hospital plan that can help with that. More on that below.

If you answered “no
If you don’t fit the criteria above, you are allowed a single period of up to three months without ACA-compliant health insurance coverage.

For example, if you’re recently unemployed but you expect to find employment within a couple of months and attain major medical at that time (either through your employer or a special enrollment period), you can technically go without temporarily without being penalized.

However, this leaves you open to the financial risk of medical bills and that’s where a fixed indemnity or short term medical plan come into play. 

Determining your tax penalty

At this point, you may be realizing you’re facing a tax penalty for anywhere from 9 to 12 months.

Depending on your income and your employment outlook, this may not be all bad news as your combined tax penalty plus alternative medical insurance premiums and deductibles could cost you less out of pocket than obtaining a major medical policy.

First, the tax penalty: for 2017, these fees amount to either 2.5% of your household income or $695 per adult in your household, whichever amount is higher[3].

Though 2018 figures aren’t available yet, you can calculate your anticipated tax penalty here for 2017 to get a ballpark estimate. (The fee increases annually with inflation.)

Once you know that number, you’ll want to ensure you can save enough money to pay that penalty when you file that year’s tax returns.

Now for the silver lining: An alternative health insurance option like a hospital indemnity plan can cover the high costs of a surgery or hospital stay without the budget busting monthly premium or deductible of a major medical policy.

Don’t go uninsured – Get alternative insurance coverage 

Even if you missed out on a major medical policy for 2018, it’s still a smart move to obtain some level of medical coverage with a fixed-benefit indemnity plan (for longer than three months) or short term medical plan (for three months or less).

Why? Well, there’s evidence to suggest that uninsured people are less likely to receive health care than their insured friends and family, and when they do, they pay more for it. Specifically,

Kaiser Family Foundation research found that[4]:

  • 23 percent of people without insurance postponed medical care due to cost compared to only 9 percent of people on Medicaid or another public plan
  • 20 percent of people without insurance went without needed care due to cost, compared to 8 percent of Medicaid recipients
  • People without insurance for an entire year pay for one-fifth of their care out of pocket and hospitals frequently charge uninsured patients much higher rates compared to those paid by private health insurers and public programs

The numbers don’t lie.

Health insurance dollars go much further than the dollars in your checking account should you actually need to use your plan. And a medical bill that you have to pay out of pocket will likely balloon your personal debt exponentially. 

Alternative health insurance, like fixed benefit hospital indemnity plans, are not ACA-compliant and do not qualify as minimum essential coverage, however they do provide a range of benefits for unexpected medical care and often have premiums that are a fraction of major medical insurance premiums.

You can get a quote online today and enroll tomorrow since these plans aren’t subject to the open enrollment period.

Or contact a knowledgeable insurance advisor by calling the number on your screen to learn more about your options.


Need Medical Coverage for 90 Days or Less? Get a Short Term Medical Quote Now.

Need Medical Coverage for More Than 90 Days? Get a Hospital Plan Quote Now.

Want to Speak to an Insurance Advisor? Locate an Agent Near You.


Originally posted January 25, 2016. Reviewed and updated December 29, 2017.

1 Policygenius. “Your state-by-state guide to the 2018 health insurance open enrollment period.” Last reviewed December 20, 2017. https://www.policygenius.com/blog/health-insurance-open-enrollment-state-guide/

2 IRS.gov. “Individual Shared Responsibility Provision – Exemptions: Claiming or Reporting.” Last revised or updated Jan. 14, 2016. https://www.irs.gov/Affordable-Care-Act/Individuals-and-Families/ACA-Individual-Shared-Responsibility-Provision-Exemptions

3 Healthcare.gov. “If you don’t have health insurance: How much you’ll pay.” Last reviewed or updated Dec. 12, 2017. https://www.healthcare.gov/fees/fee-for-not-being-covered/  

4 The Henry J. Kaiser Family Foundation. “Key Facts About the Uninsured Population.” Sep. 19, 2017. http://kff.org/uninsured/fact-sheet/key-facts-about-the-uninsured-population/

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