Obamacare 2018: What happens if you don't enroll

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Obamacare 2018: What happens if you don't enroll

For anyone looking to sign up for health insurance through the federal marketplace, time is running out to pick a 2018 plan. The deadline is Friday, though some state-run exchanges are open longer. You might be wondering, though: What happens if you don't sign up?

The answer depends on your situation, but most outcomes aren't ideal. You're better off logging onto HealthCare.gov and at least researching your options. After all, many people have been able to buy insurance for free or at least less than they paid last year. (Policygenius can help you comparison-shop health insurance plans) on and off the exchange.)

Still, we're all about education, so let's lay out what happens if you don't sign up by the end of Dec. 15.

If you have a 2017 plan

If you don't enroll in a plan by the deadline, you may still end up with coverage for 2018. Anyone who had a 2017 marketplace plan should have gotten a letter from their insurance company by now. The letter says whether your 2017 plan is available next year.

If not, the insurer should say whether it's offering a similar plan, along with that plan's premium, after any premium tax credit gets applied. This calculation is based on your 2017 information, so, if you didn't update it, the quote isn't current. The letter should also mention whether the insurer will automatically re-enroll you in your 2017 plan or enroll you in the similar plan once the deadline hits.

Auto-enrollment has some downsides. First, your 2017 plan may no longer work for your situation. If your 2017 plan is no longer available, the alternate plan your insurer puts forward, though it should have similar pricing and coverage, may not be the best fit. You won't know without looking.

Second, your income information will be out of date. This could hurt you if your updated income information allows you to qualify for more help paying your premium.

If you don't have a 2017 plan

If you're not getting automatically re-enrolled and you don't plan to sign up, then it sounds like you don't plan to have health care at all in 2018. That will likely cost you.

Anyone who doesn't buy health insurance who can afford it must pay a fee, known as the "individual shared responsibility payment." You pay the fee when you file your federal tax return. It costs either 2.5% of your household income or $695 per adult plus $347.50 per child, whichever is higher.

There's a cap on the fee, worth either the national average annual premium for a bronze plan sold through the health insurance marketplace or $2,085, whichever is higher. Given that, you may as well pay the same amount for a bronze plan so you at least get some health coverage for your money.

There are a few ways around the fee. The easiest way is to have health insurance. We're assuming you don't want insurance through the federal marketplace, but you can also get qualifying coverage through an employer, the private marketplace, Medicare, Medicaid, a parent, college or Veterans Affairs, among others.

You may also seek an exemption from having health insurance. You won't have to get insurance or pay a fee if you don't make enough income to file a tax return, if you're a member of a health sharing ministry or if you're a member of a religious group that objects to insurance. You can check the full list of exemptions and how to apply on HealthCare.gov.

The problem with almost all these exemptions is you won't have health coverage — and that's a big risk to take. You never know when you'll get sick or injured. Without coverage, a stay at the hospital can cost you thousands of dollars out of pocket.

If you accidentally miss the deadline

You'll have to qualify for a special enrollment period in order to get a plan through the federal and state exchanges. Special enrollment periods are generally triggered by big life events, including:

  1. Getting married or divorced
  2. Having a baby, adopting a child or placing a child into adoption or foster care
  3. Moving
  4. Gaining U.S. citizenship
  5. Leaving incarceration
  6. Losing other health coverage

You can learn more about how special enrollment periods work here.

If you don't qualify for a special enrollment period, you can't shop the marketplaces. Still, there are alternatives you can pursue. Some private insurers sell health plans off-the-exchanges outside of open enrollment. You can also look into short-term health insurance, limited benefit plans or prescription discount cards. These health insurance alternatives aren't ideal — and most won't get you out of the tax penalty — but they're better than going completely without coverage.

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