Though the number of uninsured Americans has dropped, many people still don’t have any type of healthcare insurance coverage. The passage of the Affordable Care Act (ACA) allows millions to choose a government-subsidized healthcare plan. However, many consumers are ineligible for subsidies, and many of those who qualify have chosen not to participate.
In the first quarter of 2023, according to a preliminary report by the National Health Interview Survey (NHIS), 7.7% or 25.3 million adults (of all ages), lacked health insurance. Survey findings showed that the uninsured rate and number of uninsured decreased from Q4 2022 (8.3% or 27.3 million people of all ages).
Key Takeaways
- Health insurance costs are on the rise for both employer-based and individual-based plans.
- Americans are no longer taxed for not carrying health insurance.
- Medical debt contributes to a large number of bankruptciesin America.
- Access to quality primary care is critical, but doctors have the right to refuse patients withoutinsurance or who are able to pay out-of-pocket expenses.
As of 2019, individuals and families without insurance are no longer taxed due to the repeal of the tax-penalty portion of the Affordable Care Act.
Absence of Medical Services
Contrary to popular belief, health providers are not required by law to provide medical services to individuals without insurance. Only emergency departments are legally bound to provide care.
The National Center for Chronic Disease Prevention and Health Promotion reports that six in 10 Americans have been diagnosed with a chronic health condition, such as high blood pressure, high cholesterol, or being overweight or obese. A study by the Transamerica Institute revealed that 66% of the uninsured in 2019 suffered from a chronic illness. Ninety percent of the nation's $4.1 trillion in annual healthcare expenditures are from citizens coping with chronic diseases and mental health issues.
The ACA requires many preventive services to be covered by insurance policies with no copay, Transamerica’s executive director, Hector De La Torre, tells Investopedia. However, he says, “Not having health coverage can keep people from accessing free preventive care.”
Preventive care is crucial to spotting illness or conditions early before they can develop into full-blown critical problems, according to De La Torre. Catching health problems early increases the probability of successful treatment and also reduces healthcare costs for treatment.
Medical Debt
Without health insurance coverage, a serious accident or a health issue that results in emergency care and/or an expensive treatment plan can result in poor credit or even bankruptcy.
“A cancer diagnosis, car accident, or even a broken leg can cost thousands of dollars out of pocket," says Dylan Roby, the director of the Division of Health Policy and an associate professor of Health, Society, and Behavior at the UC Irvine Program in Public Health.
National surveys confirm that medical bills frequently cause financial hardship, and the Consumer Financial Protection Bureau reported that they were by far the most common cause of unpaid bills sent to collection agencies in 2014, accounting for more than half of all such debts. Even when medical debt doesn’t end in bankruptcy, it takes a toll on consumers.
According to a recent study in the Journal of the American Medical Association, 17.8% of individuals had medical debt in collections in June of 2020.
Consumers with massive medical debt are less likely to be able to save money and more susceptible to the type of financial strain that leads to forgoing necessities and borrowing money, according to the Kaiser Family Foundation.
No More Tax Penalties
In 2018, the ACA tax penalty was $695 for adults and $347.50 for children, or 2.5% of one's annual income, whichever amount was more. However, in 2017, when the Tax Cuts and Jobs Act was signed into law, it repealed the ACA-related tax on Americans who refuse to purchase health insurance.
As of 2019, Americans without health insurance are not taxed by the government. However, individuals and families who choose to go without health insurance do so at their own risk.
The Bottom Line
Healthcare is expensive—even with insurance. However, those who don’t have insurance coverage will be at a much greater disadvantage. The inability to seek treatment for health conditions and the crushing weight of medical bills are two big reasons to obtain coverage.
FAQs
If you don't have health insurance, you're at much greater risk of accumulating medical bills that you may not be able to pay. In a worst-case scenario, you could be sued and have your wages garnished. You might even be forced into bankruptcy.
What would happen if you did not have health insurance? ›
Financial consequences
Without health insurance you may get charged much more for care that would otherwise be covered by your plan. This is because no one—usually the insurance company—will be subsidizing your cost of care. As a result, you may have to pay higher charges for the same services.
What are some problems related to lack of health insurance? ›
When they are hospitalized, uninsured people receive fewer diagnostic and therapeutic services and also have higher mortality rates than those with insurance. Research demonstrates that gaining health insurance improves access to health care considerably and diminishes the adverse effects of having been uninsured.
What would happen if healthcare was free? ›
A universal healthcare system could save over $450 billion per year, according to a 2022 Yale study. This could help many, since polls have found that nearly 4 out of 10 Americans have delayed or gone without healthcare because of costs.
What is the main reason people don't have health insurance? ›
Cost is the biggest barrier cited by this group to obtaining coverage. The high cost of living in California likely contributes to many in this group not being able to fit health coverage into their budgets.
Is health insurance really worth it? ›
Without insurance, you are responsible for that entire amount. But with a good insurance policy, you may only have to pay 20% of that cost, about $1,600. The impact of having health insurance is even greater for more severe illnesses because it helps you avoid large medical debts and protects your financial assets.
Why is it important to have health insurance? ›
Health insurance provides important financial protection in case you have a serious accident or sickness. People without health coverage are exposed to these costs. This can sometimes lead people without coverage into deep debt or even into bankruptcy.
What are the dangers of not having insurance? ›
Not having health insurance can lead to large debt, affect your health if you delay care and may even hurt you at tax time, depending on your state.
Which person is at highest risk for being uninsured? ›
Age. Three-quarters of the uninsured are adults (ages 18–64 years), while one-quarter of the uninsured are children. Compared with other age groups, young adults are the most likely to go without coverage.
Why do people go uninsured? ›
uninsurance has been attributed to a number of factors, including rising health care costs, the economic downturn, an erosion of employer-based insurance, and public program cutbacks. Developing effective strategies for reducing uninsurance requires understanding why people lack insurance coverage.
CON: It Could Diminish the Quality of Care People Receive
A higher patient demand could equate to longer wait times for care. In countries where universal healthcare is present, it isn't unheard of for patients to wait in upwards of two to three months to see a specialist.
Why is free healthcare so important? ›
Universal healthcare improves health outcomes by ensuring that everyone has continuous access to care regardless of pre-existing conditions, ability to pay, or any other factors.
Why healthcare needs to be free? ›
It can prevent the spreading of diseases
Affordable healthcare could tremendously decrease the spread of diseases and viruses. If everyone is getting treated the amount of people that would get the disease would be much lower.
Why are we forced to have health insurance? ›
California's Individual Mandate
In 2020, California became one of 5 states (plus Washington, D.C.) to implement its own individual mandate. The logic was the same as the federal individual mandate: The more people who have health insurance, the lower the cost of health insurance for everyone.
How do people afford health insurance? ›
There are two types of subsidies: premium tax credits and cost sharing subsidies. Premium tax credits are the most common type of subsidy and help you save on your monthly premium. Cost-sharing subsidies help offset the costs of out-of-pocket expenses such as deductibles and copays.
What age group is the most uninsured? ›
In 2019, adults aged 18–44 were the most likely to be uninsured (17.0%), compared with adults aged 45–64 (11.1%) and children under age 18 years (5.1%). Among adults aged 19–25, 17.5% were uninsured in 2019.
Why is healthcare important? ›
High-quality health care helps prevent diseases and improve quality of life. Healthy People 2030 focuses on improving health care quality and making sure all people get the health care services they need. Helping health care providers communicate more effectively can help improve health and well-being.
What happens if you don't have life insurance? ›
Loved ones might have to take out a loan or arrange a payment plan with the funeral home, or even launch a crowdfunding campaign. If no one steps forward to pay, it's possible the coroner's office will bury or cremate you without a family service.
How does healthcare affect the poor? ›
Strong health systems improve the health status of the whole population, but especially of the poor among whom ill health and poor access to health care tends to be concentrated, as well as protect households from the potentially catastrophic effects of out-of-pocket health care costs.
What is the purpose of insurance? ›
Purpose of insurance
Its aim is to reduce financial uncertainty and make accidental loss manageable. It does this substituting payment of a small, known fee—an insurance premium—to a professional insurer in exchange for the assumption of the risk a large loss, and a promise to pay in the event of such a loss.
