Not having health insurance can have serious consequences for your health, your finances, and your well-being. Without health insurance, you may face limited access to healthcare services, high out-of-pocket costs, increased risk of medical debt and bankruptcy, and potential tax penalties. Fortunately, there are some alternatives for obtaining affordable health insurance that can help you avoid these negative outcomes.
Some of the key facts about the uninsured population are:
- Most uninsured persons come from low-income households with workers.
- Children are less likely to be uninsured than adults, particularly those 19–64.
- Asians have the lowest uninsured rate, while individuals of color are more likely to be uninsured.
- The high cost of insurance is the biggest reason individuals are uninsured, followed by lack of employer-sponsored coverage, Medicaid eligibility, or immigrant status.
Understanding the Uninsured Population
According to the U.S. Census Bureau, 8.3% of the U.S. population, or 27.2 million people, did not have health insurance at any point during 2021. This was a slight decrease from 2020, when 8.6% or 28.3 million people were uninsured. However, the uninsured rate and number vary by state, age, income, race, and other factors.
Who are the Uninsured?
The characteristics of the uninsured population vary by state and region, but some general patterns can be observed. For example:
- The states with the highest uninsured rates in 2021 were Texas (18.4%), Oklahoma (14.3%), Georgia (13.4%), Florida (12.9%), and Nevada (12.6%).
- The states with the lowest uninsured rates in 2021 were Massachusetts (2.8%), Rhode Island (3.5%), Hawaii (3.6%), Vermont (4.0%), and Minnesota (4.1%).
- The regions with the highest uninsured rates in 2021 were the South (11.5%) and the West (9.0%), while the regions with the lowest uninsured rates were the Northeast (5.7%) and the Midwest (6.5%).
- Among age groups, young adults aged 19-25 had the highest uninsured rate in 2021 (13.9%), followed by adults aged 26-34 (12.9%) and adults aged 35-44 (10.7%). Children under 19 had the lowest uninsured rate in 2021 (4.8%).
- Among income groups, people with incomes below 138% of the federal poverty level (FPL) had the highest uninsured rate in 2021 (16.8%), followed by people with incomes between 138% and 399% of FPL (10.0%). People with incomes above 400% of FPL had the lowest uninsured rate in 2021 (5.2%).
- Among racial and ethnic groups, Hispanic people had the highest uninsured rate in 2021 (17.9%), followed by American Indian/Alaska Native people (14.7%) and Black people (10.0%). White people had an uninsured rate of 7.0%, while Asian people had the lowest uninsured rate of 5.7%.
Reasons for Being Uninsured
There are many reasons why people may not have health insurance, but the most common one is the high cost of insurance premiums and deductibles. Many people cannot afford to buy health insurance on their own or through their employers, especially if they do not qualify for subsidies or tax credits under the Affordable Care Act (ACA). Some people may also lose their health insurance due to job loss, divorce, aging out of parental coverage, or changes in eligibility for public programs like Medicaid or Medicare.
Another reason why people may not have health insurance is the lack of access to employer-sponsored coverage. Some employers do not offer health insurance to their workers or only offer it to full-time or certain types of employees. Some workers may not be eligible for their employer’s plan due to waiting periods or other restrictions. Some workers may decline their employer’s offer of coverage because they find it too expensive or inadequate.
A third reason why people may not have health insurance is the loss of Medicaid eligibility. Medicaid is a joint federal-state program that provides health coverage to low-income individuals and families, as well as certain groups such as pregnant women, children, seniors, and people with disabilities. However, not all states have expanded Medicaid under the ACA to cover more low-income adults who do not meet traditional eligibility criteria. As a result, some people may fall into a coverage gap where they earn too much to qualify for Medicaid but too little to qualify for subsidies on the health insurance marketplace.
A fourth reason why people may not have health insurance is immigration status. Some people may not be eligible for health insurance because they are undocumented immigrants or have temporary or uncertain legal status. Some immigrants may also face barriers to accessing health insurance due to language, culture, fear, or lack of information.
Implications of Not Having Health Insurance
Not having health insurance can have serious implications for your health, your finances, and your well-being. Some of the consequences of being uninsured are:
Limited Access to Healthcare
Without health insurance, you may face difficulties in accessing healthcare services, especially preventive and primary care. You may delay or forgo seeking care when you need it, which can lead to worse health outcomes and higher costs in the long run. You may also have fewer choices of providers and facilities, and receive lower quality of care when you do get treatment. You may rely on emergency rooms or safety-net clinics for your healthcare needs, which can be inefficient and costly.
High Out-of-pocket Expenses
Without health insurance, you are responsible for paying the full cost of your healthcare services out of your own pocket. This can be very expensive, especially if you have a serious illness or injury that requires hospitalization, surgery, or other intensive care. You may also face higher prices for your care than insured people, as you may not benefit from the discounts that insurers negotiate with providers. You may also have to pay for prescription drugs, medical equipment, and other supplies that are not covered by your provider.
Impact on Financial Stability
Without health insurance, you are at risk of accumulating medical debt that you may not be able to pay. Medical debt is a major problem in the U.S., affecting nearly 18% of individuals who have medical bills in collections. Medical debt can damage your credit score, affect your ability to borrow money and lead to collection actions, lawsuits, wage garnishments, or bankruptcy. Medical debt can also cause stress, anxiety, depression, and other mental health issues that can affect your well-being and productivity.
Potential Tax Penalties
Without health insurance, you may face tax penalties depending on where you live. Although the federal government repealed the individual mandate penalty under the ACA in 2019, some states have enacted their own penalties for being uninsured. These states include California, Massachusetts, New Jersey, Rhode Island, Vermont, and Washington D.C. The penalties vary by state but generally range from a flat fee to a percentage of your income. If you live in one of these states and do not have health insurance, you may have to pay a penalty when you file your state tax return.
Alternatives for Obtaining Affordable Health Insurance
If you do not have health insurance and cannot afford to buy it on the ACA marketplace, there are some alternatives that may help you obtain affordable coverage. Some of these alternatives are:
Medicare Advantage is a type of Medicare plan that is offered by private insurance companies that contract with Medicare. Medicare Advantage plans provide all the benefits of original Medicare (Part A and Part B), as well as additional benefits such as prescription drug coverage (Part D), vision, dental, hearing, and wellness services. Medicare Advantage plans may also have lower premiums, deductibles, and copays than original Medicare. However, Medicare Advantage plans may also have more restrictions on provider networks and prior authorization requirements.
COBRA is a federal law that allows you to continue your employer-sponsored health insurance for up to 18 months after you lose your job or experience a reduction in hours. COBRA can help you maintain your coverage and avoid gaps in care while you look for another job or another source of insurance. However, COBRA can be very expensive, as you have to pay the full cost of the premiums plus a 2% administrative fee. You also have to enroll in COBRA within 60 days of losing your coverage or becoming eligible.
Health Insurance Marketplace
The health insurance marketplace is an online platform where you can shop for and compare different health insurance plans that meet the standards of the ACA. The marketplace offers four levels of plans: bronze, silver, gold, and platinum. The plans differ in how much they cover and how much they cost in terms of premiums, deductibles, copays, and coinsurance. The marketplace also provides subsidies and tax credits to help lower the cost of coverage for eligible individuals and families who earn between 100% and 400% of the FPL.
Spouse’s Health Plan
If you are married or in a domestic partnership, you may be able to join your spouse’s or partner’s employer-sponsored health plan. This can be a convenient and affordable way to get health insurance coverage for yourself and your dependents. However, you may have to pay more in premiums than your spouse or partner does, as some employers do not subsidize the cost of coverage for spouses or partners. You may also have to wait until the next open enrollment period or a qualifying life event to enroll in your spouse’s or partner’s health plan. A qualifying life event is a change in your situation that makes you eligible to enroll in or change your health insurance plan outside the regular open enrollment period. Some examples of qualifying life events are:
- Getting married or divorced
- Having a baby or adopting a child
- Moving to a new state or zip code
- Losing your health insurance due to job loss, death of a spouse, or expiration of COBRA
- Becoming eligible for Medicare or Medicaid
If you experience a qualifying life event, you usually have 60 days from the date of the event to enroll in or change your health insurance plan. You may have to provide proof of the event and your eligibility to your spouse’s or partner’s employer or the health insurance marketplace. If you miss the 60-day window, you may have to wait until the next open enrollment period to enroll in or change your plan. The next open enrollment period for the health insurance marketplace is from November 1, 2023, to December 15, 2023, for coverage starting on January 1, 2024.
Medicaid is a health insurance program that helps cover medical costs for some people with limited income and resources. Medicaid is funded by both the federal and state governments and each state has its own rules and benefits for eligibility and coverage.