Is Health Insurance Required

Health care is one of the most contentious topics in the United States. Without medical insurance, you risk unsurmountable medical bills. But for some people, insurance itself is cost-prohibitive. 

When you receive medical services and don’t have health insurance, some or all of the costs are often absorbed by:

• Public or private providers serving the uninsured at no charge or nominal rates
• Federal and local government funds/subsidies
• Charitable donations

The National Academies Press published these findings of the Institute of Medicine (US) Committee on the Consequences of Uninsurance:

• The uninsured are less likely to use health services.
• The insured tend to utilize more health care services, and this is associated with better health outcomes.
• Lack of insurance puts families at significant financial risk with substantially higher out-of-pocket medical expenses proportionate to income compared to insured people.
• Most health care costs for the uninsured are passed down to taxpayers and health care consumers in the form of higher taxes and fewer resources available to fund other public needs.

Federal requirements

To address these issues, the Affordable Care Act (ACA) signed into law in 2010 included a provision known as the individual mandate to encourage Americans to purchase health insurance. The essence of this mandate is that people without insurance had to pay a penalty when they filed their taxes. 

The Health Insurance Marketplace was established to help people find affordable coverage without the exclusion of pre-existing conditions. If qualified, you can apply for government subsidies to help pay premiums.  

The individual mandate was controversial from the time it was established and was hotly debated for years. The Tax Cuts and Jobs Act eliminated the penalty effective January 1, 2019. The Marketplace still operates across the country. 

State requirements

Although the federal government eliminated the noncompliance penalty, some states passed laws to continue the individual mandate. If you live in one of these locations, health insurance coverage is required:

• California
• District of Columbia (DC)
• Massachusetts
• New Jersey
• Rhode Island

Vermont lawmakers have yet to agree on a penalty for noncompliance, though Vermont enacted an individual mandate in 2020. The penalty may be a subject for future discussion. In the meantime, if you live in Vermont, you must report your health insurance coverage for every month of the year.

How to find affordable health insurance

Medicare is usually associated with people who are at least 65 years old, but you may be eligible for Medicare insurance under age 65 if you have:

• A disability and receive benefits from Social Security or the Railroad Retirement Board for 24 months
• Amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease
• End-stage renal disease (ESRD) with permanent kidney failure

If you are under 65 and do not qualify for Medicare and plan to apply for health insurance through the Marketplace, mark your calendar for the Open Enrollment Period, which is November 1 – January 15. HealthCare.gov advises that “more people than ever before qualify for help paying for health coverage, even those who weren’t eligible in the past. Most people currently enrolled in a Marketplace plan may qualify for more tax credits.” 

If you have questions or need help as you search for and compare healthcare plans, talk to a licensed sales agent who can help narrow down your options and help you find the plan that’s right for you.