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You Can’t Pay Your Premium – Then What?

You Can’t Pay Your Premium – Then What?

Many individuals today do not realize that when it comes to acquiring health insurance signing up for a plan is one thing, and paying your monthly premiums to keep the plan is another thing altogether.  Events cush as a sudden change in income or an unexpected expense can cause that recurring monthly insurance bill suddenly unmanageable, and you find that the possibility of losing your coverage may be looming.

Each year, millions of Americans will enroll in a health insurance plan, only to see an estimated thirteen percent of them not being able to make that first month's premium payment.  Then, for others, the problem will arise later in the year when they experience a financial set back, leading to a late payment that has the potential of seeing them losing their coverage.

It is in your best interest to know what to expect should such a situation occur so that, if nothing else, it will soften the blow if it happens.

What Can You Expect

The fact is that if you fail to make payments on your health insurance premiums, you will, in time, eventually lose your insurance coverage.  The time it will take for that to happen will vary, depending on different factors, such as if you are eligible to have a portion of your premiums covered by tax credits.  Tax credits offered by the government were designed for situations such as these and can often make the expense of insurance premiums more affordable.

If you apply for assistance with your insurance premiums and qualify, you will most often receive a grace period of 90 days to allow you to catch up on what you owe.   However, the clock will start ticking on the date the premiums are due, and if for some reason you fail to make good on your payments in the grace period allotted, the provider will cancel your policy.

There are several time frames set within your 90-day grace period that are important to know:

-         Your insurer must pay any medical expense claims within the first 30-days of the grace period.

-         From days 31 to 90, your insurer is permitted to put payments on hold for any claims filed until you have caught up and made good on your premiums.  If the premium is up to date when the grace period ends, the insurer will be liable to pay any claims filed.  If you are not up to date,the claims will be remanded back to the medical provider and will become your responsibility to pay.

-         After the initial 30 days of the grace period have passed, your insurer is required to reach out to your medical provider and inform them of the premium you owe.  Some providers may not accept your health insurance policy as a result and require that you pay your bill in cash.

Your Options

You will have several options if you find you cannot keep up with your monthly premiums.  Those include:

-         Requesting assistance – if you find you are the victim of a significant reduction in your income or that your family situation has changed, you may be able to apply for and receive Medicaid.  To determine eligibility, reach out to the federal marketplace, your state exchange, or your local Medicaid office for assistance.

-         Be Prepared – the option of going without having any form of health insurance is risky at best. However, money can sometimes be tight, and if you don't qualify for Medicaid, you may have to forgo coverage. Make sure to prepare for a possible lapse in coverage by planning any medical services you may need before your premium is missed and you enter your grace period.

-         Open Enrollment – there will undoubtedly be a more affordable rate out there, but the problem is you will have to wait until the yearly open enrollment period.  The wait will only be waived if you have a qualifying event, however, not paying your premium does not fall under this exception. Hang in there, and when the enrollment period rolls around, shop for a plan that possibly offers the insured the choice of a lower monthly premium in exchange for higher deductibles.

Here at Savvi, our mission is to help people take the stress out of buying health insurance in Houston, San Antonio, Dallas, Ann Arbor, and Grand Rapids.  Feel confident by knowing that you'll have the absolute best plan that fits your lifestyle & budget. We look forward to working with you.