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If you’re falling behind on your health insurance premiums, you could find yourself without coverage after as few as 30 days.
Losing health insurance is not as rare as you might think. An estimated 13% of those who signed up through Affordable Care Act (ACA) federal and state marketplaces in 2015 lost insurance due to premium nonpayment. If you’re worried about losing your health insurance, the good news is that there are safeguards in place to protect you, and some options available should your policy lapse.
The best way to keep your health insurance is to take action when you start falling behind on premiums. Here are a few things to keep in mind before you lose coverage, ways you can prevent it, and what to do if you lose your insurance due to nonpayment.
What to know when you start falling behind
- Marketplace customers are entitled to a 90-day grace period. If you received an Obamacare subsidy to reduce your monthly premiums, the ACA instituted a 90-day payment grace period for your health plan. For the first 30 days after you miss a payment, your insurance company must pay your claims. For days 31-90 of the grace period, it doesn’t have to pay the claims but will hold them rather than denying them. Use those 90 days to do everything possible to get premiums paid up.
- Private insurers also often offer a grace period. If your plan isn’t protected by the ACA 90-day grace period, your insurer may still offer you some time to catch up. Thirty days tends to be the norm, but there’s no hard rule for private insurers. Your best chance for resolving the issue with minimal disruption is to contact the insurer directly and explain your situation.
Once you know your coverage will be canceled
If your policy is canceled or you know a cancellation is inevitable, you should immediately begin looking for other coverage options or budgeting to pay out of pocket. Nonpayment of premiums disqualifies you from special enrollment periods to purchase more insurance on the federal marketplace, so you won’t be able to get a cheaper plan until the next open enrollment period begins Nov. 1.
Depending on the extent of your current financial hardship, you could be eligible for several cost reduction options. Here are some ways you can lower costs should your policy be canceled.
Medicaid: Check with your state’s Medicaid office for eligibility specifics.
CHIP: Children’s Health Insurance Plans are offered for free to cover kids in families that meet income requirements. Information on CHIP is also available at the Medicaid link above.
Cheaper care options: If forced to go uninsured for the remainder of the year, set aside what you can to pay for your medical expenses and don’t be afraid to use community health centers. You should opt for urgent care instead of emergency rooms for minor accidents and illnesses.
Lower prescription costs: You can save money on prescriptions by opting for generics, choosing more affordable therapeutic alternatives when generics aren’t available, and applying for payment assistance through drug manufacturers and nonprofit organizations.
Always compare prices: Be a savvy consumer by comparing prices for medical services as you would for anything else.
Negotiate your current medical bills: If you find yourself holding an unmanageable medical bill, call your provider and negotiate. You’ll often find they’re willing to work with cash-paying customers who are having a difficult time.
It can be scary to think about losing your family’s health coverage. But if you do, don’t try to hide. Instead, plan ahead and work with your insurance company proactively. If you do, you stand a better chance of protecting yourself from sky-high medical bills.
Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: firstname.lastname@example.org. Twitter: @LacieWrites.
This post updated March 14, 2016.
Image via iStock.