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What If You Suddenly Can’t Afford Your Health Insurance?

A young, Caucasian woman covering her face in desperation because she suddenly cannot afford health-insurance.

Let’s face it – life can throw us a curve that can make paying our bills go from easy, to barely making them, to not making them at all. And, that can apply to health insurance. After all, getting health coverage as mandated by the Affordable Care Act or Obamacare, is one thing – but, having to make the premium payments each and every month is quite another.

Since we have to be covered by some kind of qualifying coverage or face a penalty for not having health insurance – you may be asking yourself – What if I suddenly can’t afford my health insurance?

Well, if your health insurance is through your job, your premiums are automatically plucked from your paycheck every month and unless you experience a qualifying life event, such as marriage, you’re bound to that policy until open enrollment.

On the other hand, if you make monthly payments out of pocket for private health insurance that you purchased on the federal marketplace or state exchanges – like Covered California – a sudden dip in your income or a slew of unexpected expenses can make paying that recurring bill not only unmanageable, but could also result in the possibility of losing coverage.

According to the Department of Health and Human Services, approximately 11.7 million Americans enrolled in health insurance during the open enrollment period for 2015. But, of that total – as of March 31st – about 13 percent had lost coverage for not paying their first month’s premium.

For reasons yet to be determined, the difficulty of maintaining health insurance coverage for some people seems to come later in the year. Often, the first sign of trouble is when a late payment can potentially cause your health insurance to be canceled. If you find yourself in a difficult financial situation, make sure you know as much about your options as possible to keep things from going from bad to worse.

It’s quite simple – stop making monthly payments on your health insurance and you will eventually lose coverage. But, the amount of time it takes for that to happen depends on whether you’re eligible for tax credits on your premiums. Those tax credits are what make your health insurance affordable.

Furthermore, if you qualified for assistance on your premiums – of which an estimated 87 percent of enrollees did for 2015 – you’re afforded a 90-day grace period to catch up, according to HHS. Your payment due date is designated as the start of a new 90-day clock. However, failure to catch up on payments during that time will result in the cancellation of your policy.

Below are important facts about the 90-day grace period you should keep in mind:

During the first 30 days of the grace period, your insurer must continue to pay claims on your medical expenses.
From days 31 to 90, at their discretion, your insurer can withhold payment on claims until you catch up on your premiums. Should you be able to bring your payments up to date by the end of the grace period, your claims will be paid. However, if you don’t catch up, all medical bills will be sent back to the medical provider and they will become your financial responsibility.
Following the initial 30 days, the law requires insurers to inform medical providers that you owe money. The result could be that some providers may refuse to accept your on-hold health insurance and require cash payment only for services until you are current.
If you miss your monthly payment – and you didn’t qualify upon enrollment for the premium tax credit – be advised – your policy will be canceled after just 30 days.

Still, you may be eligible for assistance, especially if your inability to pay is due to a significant reduction in your income or a change in your family situation – like a divorce. You may qualify for Medi-Cal (Medicaid), which you can apply for year-round or your children may be eligible for the federal Children’s Health Insurance Program.

The last thing you want to do is go without health insurance. It’s a gamble you really don’t want to take. Get the best health insurance rates by calling Freeway Insurance at (800) 777-5620 or get your  free California health insurance quote online.

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