Before deciding if health insurance is illegal or not, we should accept that it is necessary. The last thing you want to play around with is your health, and a delay of treatment due to money can have fatal consequences.
Why is it illegal to not have health insurance?
Let us look at why it is necessary to have health insurance. When a person has an accident or some injury, he might or might not have the instant availability of funds to pay for his medical treatment. It is where health insurance companies come in handy. They provide you financial coverage for your medical bills. But what happens if a person does not have health insurance? Will he be fined by the government of the United States of America? Does he have any advantages or disadvantages over not having health insurance?
The law of the United States of America states that each state can carry out its legislation, so it means that each state does not need to have the same laws for health insurance. Some may consider it illegal, whereas, in some states, it is considered legal to not have health insurance. In the USA, most states consider it legal for their residents to not hold any health insurance.
It is not the case if you live in a country outside the United States of America. Around 99 percent of countries have passed laws to make it compulsory for residents to acquire health insurance. Moreover, they consider it illegal and say that legal action will be taken against the people who do not acquire health insurance. It is not the case in the United States of America, and the government only has the right to advertise and encourage the people to take health insurance.
A statistical report in recent years declared that more than forty thousand people living in America died of lack of insurance to cover their medical bills. It also said that more than a million people each year go bankrupt due to not having health insurance or signing up an inefficient insurance policy with health insurance companies. So as a result, it is illegal to not have health insurance, but you need to have loads of money to cover up those medical bills and also to prevent yourself from going bankrupt.
The united states of America have the organization of affordable care act to deal with issues related to health insurance. Some of these issues include frauds committed by people to acquire insurance money. In the United States of America, most people are not affiliated with the affordable care act. So it does not work as effects as it should. To actively work, more and more people have to affiliate themselves with the affordable care act.
Moreover, people do not affiliate with the affordable care act as they think they have no risks to their health, and a majority of the young population the same way. Moreover, people who live in areas having a strong history of natural disasters have a higher ratio of alliance with the affordable care act. Moreover, the aged people also affiliate themselves with the affordable care act. As a result, we can say that the government considered it illegal to not have health insurance to prevent people from going bankrupt and dying just because they did not have health insurance
Moreover, it has also been proven by the law that it illegal to not have health insurance. Before 2019, it still was not considered illegal to not have health insurance, but there was a condition for it. The condition was the people who do not acquire health insurance have to buy themselves the facility of the last 10-basic health benefits. If a person did not buy these 10-essential health care facilities, he would be fined according to law and have to pay extra tax. After 2019, the government of the United States of America made it compulsory for every person living in the United States to acquire health insurance. Moreover, the fines and tax applications were also increased.
Tax rates change from time to time, and it is done to cope with the accidents that occur each year. I will explain using an example. Suppose 200 people died in 2019 and then 400 people died in 2020, so the government will have to take steps to stop the death ratio from increasing as it is dangerous for the growth of the country. Moreover, most of these deaths are due to the rash driving of youngsters and the deaths of the young generation are not a good thing for any country. Due to these reasons, the government changes laws to make insurance even more strict so that they could control the death ratio. They also increase fines and taxes to support the health insurance system.
However, they also ordered health insurance companies to lower their monthly premiums so that they can encourage more and more people to go for health insurance. The reason the United States of America is stressing so much over health insurance is that they want to relieve themselves of the spending’s of the health sector and hand it over to private and state-owned insurance companies. It is because they want to spend the extra amount on other departments such as education and security. The country is suffering from problems, and the money saved from the health sector can be spent on other areas. As a result, we can say that it is illegal to not have health care insurance because the government wants to lessen the burden on the economy, spend more on other sectors and help the country develop.
The other reason the government wants to illegalize not having health insurance is that they want their industry to flourish and boosts. These health insurance companies contribute a lot to the GDP of the country, and hence they want to provide as many initiatives to these countries so that they can run smoothly. If many insurance companies make a profit, the more they will pay in taxes to the government.
For the insurance companies to be profitable, they need to have more young people. Now you might get a little confused, so ill explain this using simple words. Suppose a health insurance company has 100 customers that pay a premium to them. Out of those 100 people, 90 are aged and have a higher risk of medical treatments, but the younger generation is only ten and has a lower chance of injury. From this, we can conclude that elderly people are more likely to file for claims, and this means that the company will earn fewer profits if it keeps on giving claims. So the government decided to make it compulsory for all people, including children and younger people to file for health insurance. It means that the insurance company will gain more from the premiums and pay out less to the people.
As a result, their profits will boost and the government will receive a much higher amount in taxes and which would lead to the development of the country, so the government made it illegal to not have claimed because they want to boost tax collection.
However, the insurance companies started to play another game with the government. They wanted to reduce their risk of giving out claims to the people and want it to bring it down to almost zero. It was not possible due to the affiliations of the elderly with the health insurance companies, so they decided to discontinue giving health insurance to people who were very old.
Moreover, they also did not accept giving health insurance to residents of the country who had some medical conditions before they apply for insurance. It reduced the risk factor, but how? Let me explain. When they decreased the number of elderly people and people with pre-existing health conditions, they increased their profits. It is because the elderly people and people with pre-existing health conditions would not apply for claims, and so the company does not have to pay them.
However, this was causing a burden on the economy of the country as it was not possible to provide health care aid to all of these people as it would restrict the country to utilize the tax money in other major sectors. The government of the United States wanted to curb this, and so this issue was solved before the application of the affordable care act. According to this, the health insurance company could not reject elderly people and people with pre-existing health conditions to take up health insurance.
Penalties for not having health insurance:
After the law was updated in 2019, the government does not fine the residents of the United States of America for not having health insurance. The states have individual powers, and so some of them do impose fines on people who do not have health insurance. The current penalty for not having health insurance is a fine of 695 dollars for adults and 347.50 dollars for children. Moreover, the penalty can also be applied to your yearly income. However, it is not allowed to imply both of them simultaneously. The formula for yearly income is to apply 2 percent on yearly income, but the government will choose the one which has a higher amount.
This penalty was applied so that the government of the United States of America can enforce the people to take up health insurance services provided by different insurance companies, and thus improve the tax collection. Moreover, these penalties were applied, so that people could timely pay for their hospital bills when they face accidents or emergencies.
There are no laws to impose federal fines, but we should look into the penalties that some of the states of the United States of America impose on their people if they do not have health insurance. Some of the states with laws for fines are:
New Jersey: this state brought its health insurance policy in 2019, and it was also brought into legislation in 2019. The health insurance policy has several conditions according to which the fines are imposed. It is based on the city prices for health insurance policies at the bronze level.
Massachusetts: This city introduced and brought the health insurance policy in 2006. Before 2006, people living in this city were also exempted from taxes and fines imposed by the state. And it was exempted if someone paid their tax dues at a federal level. However, when the federal removes its policy on health insurance, the state will start imposing state foo on the residents too.
Vermont: they have a clear health insurance policy with a set of fines for people who do not follow health insurance laws on the premises of the city. This law was introduced in the state in 2020.
District of Columbia: the District of Columbia also has their health insurance policies that the people have to follow. These laws were brought to legislation in 2019.
Other than these states, all the other states follow the same law that is followed by the federal government.
What to do if you don’t qualify for a special enrollment period?
Have you ever thought that if you don’t qualify for a special enrollment period, what do you have to do? Maybe some of you can not afford the expenses so is there another way for such people? Yes, there is another way for these people. It was introduced for people who can not afford to pay a higher amount of premiums to health insurance companies. These people are given cheap premium plans, and as a result, they are also given short-term coverage.
This short-term coverage plan is very flexible, and it means that you can start in any month of the year, or you may also start it on the first of January. There are some positive effects to this as well as some negative effects too. The positive thing is that it proves to be less expensive than other plans of ACA and the effects are that the package provides to the individuals does not include some essential health care benefits such as coverage for maternity. Moreover, another major disadvantage of short-term coverage plans is that if you face a major accident, and the hospital bills are very high, then the short coverage might not be able to compensate for it or it may compensate only a portion of the bill. So you will have to arrange extra money to pay for your hospital bills. Other than that, it is a plan for poor people who can not afford expensive monthly premiums.
How to avoid penalties or fines for individual states?
The best way to protect you from these fines is to avoid financial burden on yourself. You have to protect yourself from heavy medical expenses and to do this; you will have to enroll yourself in a health insurance plan. It is best to join health insurance plans during the open enrollment period. Note down these important dates. The open enrollment period will start from the 1st of November and end on the 15th of December 2021. Some states have different dates as they have extended their dates. You can know more about this from the website of OBAMACARE open enrollment 2021.
If you lose your insurance in the middle of the year, you can save yourself from fines. The method for this is to apply for an enrollment period and buy an ACA-compliant plan. It can be bought at any time outside the public exchange. It depends on what state you live in, and so it depends if you can get into a short-term coverage plan or not.
Therefore, we can conclude that it is illegal if a person does not have health insurance coverage, and it is due to several reasons. Some of the reasons are for the development of the country and other reasons are for the protection of the people so that they do not die just because of no insurance. You should consult with online insurance help such as health. Health provides multiple solutions to your problems, and they also inform you about the best health insurance plans for you.