Going without health insurance can lead to severe financial consequences. An illness or injury can wipe out your savings. In addition, since 2014, people have paid a penalty for not having health insurance. Congress removed that penalty, effective Jan. 1.
The end of the penalty may lead people to skip health insurance in 2019, which could be a reason why the number of people buying plans on Healthcare.gov is down compared to last year. But even without a penalty, buying health insurance remains a solid way to protect your budget from a big medical bill. (Policygenius can help you compare health plans.)
The impact of the individual mandate
From Nov. 1 through Dec. 1, 3.2 million people selected health insurance plans on Healthcare.gov, according to the Centers for Medicare & Medicaid Services. Over the same period last year, 3.6 million people had picked plans. The end of the penalty could be one reason for the 400,000-person drop, but it's too early to tell, said John McDonough, a professor of public health practice at the Harvard T.H. Chan School of Public Health, who helped pass health reform legislation in Massachusetts in 2006.
"That could be substantially related to the elimination of the penalty tied to the individual mandate, or it could be other factors, or it could be a combination of all of them," he said.
The cost of insurance coverage may be a more important factor in why fewer people are signing up, McDonough said. Monthly premiums on Healthcare.gov rose from $204 in 2016 to $406 in 2019, according to an average used by the CMS.
"For a lot of folks, it's simply too big a financial stretch," McDonough said.
The point of the individual mandate is to keep prices low. When a greater number of healthy people buy plans, health insurance companies can afford to charge lower prices to each policyholder. The end of the penalty has not led to higher prices so far. Premiums for 2019 plans are down slightly compared to last year. But if enrollment dips further, insurers may have to hike prices in the future.
State individual mandates
Not everyone can skip health insurance penalty-free in 2019. Some states have enacted their own mandates. Massachusetts has had a mandate since 2006. New Jersey and Washington, D.C., passed mandates that take effect in 2019, while a Vermont mandate starts in 2020.
A few other states are considering mandates as well, but there is no broad movement to penalize people for not buying health care.
How to get health insurance
The penalty may be gone for many people, but skipping health care could still be costly. If you get sick or injured or get in an accident, you may be stuck with expensive medical bills or unpaid time off from work.
The deadline to sign up for a plan through Healthcare.gov is Saturday. Many people qualify for subsidies that reduce the cost of their plans. Others may be able to apply for Medicaid.
Learn everything you need to get health care in 2019 with our step-by-step guide.