The Real Cost of Going Uninsured 

Most Americans who go without health insurance even when they can afford coverage face a penalty when they file their federal income taxes. In some instances, though, the real cost of going uninsured can go well beyond the government penalty.

Here’s what you need to know if you’re thinking of skipping coverage.

Flat fee versus household income

The penalty for non-coverage in 2016 is a flat fee of $695 per person ($347.50 per child) OR 2.5 percent of household income – whichever amount is greater. The flat fee applies to every uninsured household member, with the family maximum capped at $2,085. This is the first time the penalty could exceed the cost of health insurance for some people, especially if they qualify for subsidized coverage at HealthCare.gov or their state Marketplace.

No grace period

Unlike last year, the federal government has no plans to offer a special enrollment period around tax time for those who have not enrolled for coverage. Plus, the government has tightened eligibility and verification rules for those requesting a special enrollment period, making it tougher for people to purchase health insurance outside of the open enrollment window that ends Jan. 31, 2016.

Risky business

The real cost of going without health insurance, however, could be astronomical if you or a loved one suddenly faces a serious injury or diagnosis. The cost of a trip to the emergency department, treatment for a devastating illness such as cancer, or rehabilitation after an automobile accident can be daunting. Mounting health bills can ruin your credit history and are a major reason for bankruptcy.