Uninsured? Understand Your Risks

Healthcare is expensive. Being uninsured is risky.
Healthcare is expensive. Being uninsured is risky. Peter Dazeley/Creative RM/Getty Images

Whether you choose to be uninsured or you go without health insurance because you have no other choice, you face risks because you don’t have health insurance. Clearly understanding those risks can help you make informed decisions.

Financial Risks

Medical bills undoubtedly contribute to many personal bankruptcies. Even if you’re relatively wealthy, if you have a serious illness or a bad accident, your medical bills could be unmanageable if you go without health insurance.

Learn more about medical bills and bankruptcy in the Health Affairs article “MarketWatch: Illness and Injury as Contributors to Bankruptcy,” and in FactCheck.Org’s “Health Care Bill Bankruptcies.”

If you're uninsured in the United States, you'll also face a tax penalty unless you're exempt from the penalty. This penalty can be as much as 2.5% of your yearly income, but won't be more than the national average for a bronze-tier health plan on health insurance exchanges that year.

Health Risks

Being uninsured can negatively affect your health. In its 2009 report “America’s Uninsured Crisis: Consequences for Health and Health Care” the Institute of Medicine found that  “Without health insurance, adults have less access to effective clinical services including preventive care and, if sick or injured, are more likely to suffer poorer health outcomes, greater limitations in quality of life, and premature death.”

And a 2016 Kaiser Family Foundation report notes that "uninsured people are far more likely than those with insurance to postpone health care or forgo it altogether. The consequences can be severe, particularly when preventable conditions or chronic diseases go undetected."

Risks to Your Loved Ones

You’re not the only one put at risk when you’re uninsured.

Because how you live your life affects those around you, your loved ones are at risk when you go without health insurance. For example, they’ll suffer financially if they help you with medical bills. If they depend on you financially and you have a financial crisis due to health care bills, they’ll suffer the repercussions of your financial crisis. Worse, your loved ones will suffer when your health deteriorates if you can’t get care because you’re uninsured.

Risks to Your Local Community

In the bigger picture, if you can’t pay your medical bills because you’re uninsured, your community and society as a whole suffer. For example, the health care providers who spent their time and resources caring for you will suffer by being unpaid. Businesses in your community will suffer when you change your spending habits due to large medical bills. Your coworkers and your employer will suffer when you call in sick more often because you don’t have access to health care or if your health deteriorates and you’re not as productive at work.

Risks to Society

Society as a whole can suffer if you’re uninsured. Even if you don’t make a lot of money, you still contribute to society in many ways. For example, if you do a good job of raising your kids, you’re contributing to society by raising future community members. Having a job, volunteering, looking out for your neighbors, and providing emotional support for your friends and loved ones are all contributions to society as a whole.

If you go without health insurance and that causes delays in treatment or access to health care, those delays can make you sicker, potentially even leading to disability. Society as a whole will suffer because you won’t be able to contribute as much as you did when you were healthy. If you become disabled because you didn’t have access to health care, not only does society pay your disability payments, but it loses out on your current and future productive contributions to society. 

Many of the disabled end up on Medicaid, Medicare or both. If you’re on Medicaid, society as a whole is paying for your  health care. If you become disabled and go on Medicare early, before you’ve contributed to it through payroll taxes for years, society loses out on your Medicare contributions as well as having to pay for your Medicare benefits.

Risks to the entire health insurance system

All of the people who are covered under a carrier's health insurance plan are part of a risk pool. A stable, sustainable risk pool relies on having a large percentage of healthy enrollees to make up for the relatively small number of enrollees with significant health conditions.

One of the main reasons we're seeing spiking individual market premiums and health insurers leaving the exchanges at the end of 2016 is because not enough healthy people have enrolled in coverage. As a result, the overall risk pools have skewed more towards the less healthy end of the spectrum, and claims costs have overwhelmed some carriers. 

The only way to keep the health insurance system stable and viable is for healthy people to enroll in coverage to offset the claims costs for those who are less healthy. And although you may be perfectly healthy now, that might not always be the case. If and when you ever need significant medical care, the costs will be borne by all of the healthy enrollees in your carrier's risk pool, assuming you're insured at that time.

Being Uninsured

Whether you choose to go without health insurance or you’re uninsured because you have no other choice, you’re taking risks. Some, but not all, of those risks can be decreased. This tool kit will help you prepare for being uninsured and, as much as possible, help you mitigate the risks associated with being uninsured.

Updated by Louise Norris.

Sources:

Kaiser Family Foundation, The Uninsured: A Primer - Key Facts about Health Insurance and the Uninsured in the Wake of National Health Reform. November 1, 2016.

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