While 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 2018, according to a report by the U.S. Census, 8.5 percent of people, or 27.5 million adults (between the ages of 19-64), did not have health insurance at any point during the year. Census findings showed that the uninsured rate and number of uninsured increased from 2017 (7.9 percent or 25.6 million).

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 Transamerica Center for Health Studies released a report revealing that 62% of Americans have been diagnosed with a chronic health condition, such as high blood pressure, high cholesterol, or being overweight or obese. The study also found that only 56% of uninsured Americans could afford to pay for their routine health expenses.

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 bankruptcies in America. 
  • Access to quality primary care is critical but doctors have the right to refuse patients without insurance, or who are able to pay out-of-pocket expenses. 

Transamerica’s executive director, Hector De La Torre, tells Investopedia that the ACA requires many preventive services to be covered by insurance policies with no co-pay. However, he says, “Not having health coverage can keep people from accessing free preventive care.”

De La Torre explains that preventive care is crucial to spotting illness or conditions early before they can develop into full-blown critical problems. Catching health problems early increases the probability of successful treatment and also reduces the health care 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.

Dylan Roby, associate professor of Health Services Administration at the University of Maryland School of Public Health, tells Investopedia, “A cancer diagnosis, car accident, or even a broken leg can cost thousands of dollars out-of-pocket.”

And as a result, for several years, medical debt has been the number one cause of personal bankruptcy, according to De La Torre. Even when medical debt doesn’t end in bankruptcy, it takes a toll on consumers.

Approximately 137.1 million adults reported any medical financial hardship in 2018, according to research in the August 2019 issue of the Journal of General Internal Medicine.

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 foregoing 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% of one's annual income, whichever amount was more. However, when President Trump signed the Tax Cuts and Jobs Act, 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.