The Costs of Not Having Health Insurance

It’s open enrollment: time to select your health insurance plan for the coming year.

If you were thinking about skipping it this time around, get ready to pay regardless. Fines for not having coverage are increasing. For 2016, they will be $695 for each adult and $347.50 for each child, up to $2,085 for a family. Or it could be 2.5 percent above the filing threshold, says the IRS (individuals $10,150, couples filing jointly $20,300), whichever is higher.

How will the government find out whether or not you have insurance?

The law requires insurance companies to submit “proof of insurance,” which includes the number of months you were covered. You will get that notice, and the IRS will get it too. The IRS will penalize all those without insurance, unless they qualify for an exemption.

If you are one of the 80 percent of Americans who get a tax refund, the fine will be deducted from it. If not, the IRS won’t come banging on your door. The Patient Protection and Affordable Care Act forbids the IRS from using levies or liens to collect the penalty.

If you’ve calculated that penalties will cost less than your annual health insurance premiums, think again. Yes, medical insurance is expensive—but so is medical care. In a 2014 study, NerdWallet reported that:


  • One in five American adults struggles to pay medical bills.
  • More than 35 million will be contacted by collections agencies for unpaid medical bills.
  • Nearly 17 million will have a lower credit rating due to high medical bills. This could affect their ability to get a mortgage, car loan or other credit.
  • Nearly 10 million will not be able to pay for necessities such as rent, heat and food due to medical bills.
  • Nearly 2 million Americans live in households that will declare bankruptcy due to medical bills.


If choosing a plan overwhelms you, please call us. As licensed insurance professionals, we have the expertise to help you select a health insurance plan—even from the health insurance exchanges. And it won’t cost you extra.