Generally speaking, the point of having health insurance is to use it when you’re sick or need to see the doctor.
However, there are some occasions when it may actually make sense to pay for medical care out of pocket rather than use your health insurance coverage.
So, in these times where it looks like it is best not to use your insurance plan, is it possible to do so? If so, what situations call for you to pay for it directly or through other means? Another critical question to answer would be, “Is it illegal to not use your health insurance?”
This guide serves as an essential resource if you are interested in learning about the legalities of not using health insurance for a medical procedure, simple primary care visit, or different medications.
Is It Illegal to Not Use Your Health Insurance?
Healthcare coverage is a pressing issue today and can impact the economy by affecting wages, job growth, and general business growth. Lawmakers sought to solve or alleviate the issue by presenting the Affordable Care Act (ACA), which passed in 2010. The principal aim of this Act was to increase Medicaid eligibility for more low-income individuals and their families. This act undoubtedly made health insurance coverage more affordable.
However, citizens needed to obtain health insurance. Otherwise, individuals would have to pay a fine. This regulation changed when the tax penalty obligation for health insurance was removed in January 2019. As a result, people did not have to pay a tax penalty for not providing health insurance for themselves or their families.
Many states have removed the penalty for those seeking medical services without insurance plans. This means that it is not illegal to not use your health insurance for medical services. Medicare patients may have different requirements.
Patients can elect to pay for medical services if they find it in their best interest to pay for them directly. So now that you know you can self-pay if you have insurance, let’s learn more about the times when it makes sense to do so.
When Would It Not Make Sense To Use Your Health Coverage?
Health coverage is essential in many different situations because a comprehensive policy can help you avoid high out-of-pocket costs. However, there are some instances when paying with your own funds may be more beneficial than using your health coverage.
Now that you know that it is legal to self-pay when you have insurance, here are a few situations where it may make sense to directly pay for the medical procedure or service without filing a claim with your provider.
1. When the deductible year is almost over and you’re a long way from meeting it.
This is one of the primary reasons to opt-out of your health insurance plan. Deductibles often reset annually, so it may make sense to pay cash if you need to see a doctor towards the end of the year, especially since you are far from hitting your deductible.
It is crucial to find out how much you are required to pay if your insurance handled the claim. Then, figure out what your medical provider would charge for the service you need if you were to pay cash. Finally, ask if any discounts are available for up-front payment. This will help you see a clear difference in your insurance expenditure. You may even want to shop around a bit as a “cash customer” to compare prices.
Sometimes, paying cash is less expensive than processing the claim through the insurance provider. However, keep in mind that the money you spend out of pocket won’t count toward your deductible when you don’t use your health insurance to pay for medical care.
2. When you’ve decided that you want to see an out of network provider.
Out-of-network providers can cost you more depending on your insurance policy. In fact, some health plans don’t cover out-of-network providers at all, while others may provide you with a lesser amount of coverage when you see out-of-network providers. This means you may not receive the care that you need and you will have to pay with your own money.
Depending on your plan, there could be little use in having the claim processed via your insurer if you’ve decided that you want to see an out-of-network healthcare provider. Make sure to ask the medical provider for a discount as a cash customer. Many will give you one.
3. When you can find a better price for your prescription drug needs.
Some health insurance policies offer reasonable copayments for prescription medications. However, others may demand that you meet a sizable deductible before the insurer starts paying for your prescription drugs.
If you’re facing a large deductible, you may want to consider paying for certain drugs out of your own pocket rather than having them processed through your insurance company. This can be especially useful if the deductible year is coming to a close.
Expenses that are paid with your own money won’t go against your annual deductible. Occasionally, however, you will be able to get a better cash price than what you’d have to pay when your insurance processes the claim. This means you can get more medications for less.
Types of services commonly self-paid
Preventive services and screenings
While many preventive services are covered under health insurance plans, some specific screenings and tests may require out-of-pocket payment, especially if not considered standard or if conducted more frequently than recommended by healthcare guidelines.
Cosmetic procedures
Cosmetic procedures, which are primarily aesthetic and not medically necessary, are typically not covered by health insurance. Individuals often pay for these procedures themselves, including treatments like Botox, liposuction, and cosmetic dental work.
Alternative and complementary therapies
Treatments such as acupuncture, massage therapy, and herbal medicine often fall under alternative or complementary therapies. These services are usually not covered by standard health insurance policies and are thus commonly paid for out-of-pocket.
Out-of-network services
When patients choose healthcare providers outside their insurance network, they usually face higher costs. Out-of-network services can result in significantly larger out-of-pocket expenses due to lower reimbursem*nt rates.
Elective surgeries and procedures
Elective surgeries, which are not medically necessary and often include procedures like elective orthopedic surgery or cosmetic surgeries, are usually not covered by insurance and require self-payment.
Wellness programs and lifestyle services
Wellness programs and lifestyle services, such as fitness classes, diet counseling, and some preventive health programs, are often considered non-essential by insurance providers and typically require direct payment by the individual.
Self-Paying vs. Using Your Health Insurance
Healthcare coverage is essential because it can help you account for unexpected events and significant medical expenses. Large medical expenses can substantially impact your financial and mental health. Healthcare coverage can help you avoid medical debt and ensure your health is taken care of.
While it is not illegal to self-pay if you have insurance, we always encourage individuals to have the right health plans to ensure they are prepared for significant medical expenses.
Still, we know that there are times when it does not make sense to file a claim with the insurance company. It is a personal choice to use or forgo your coverage policy. It may be a fantastic choice if you find it in your best interest to do so.
The healthcare and insurance landscape at the present moment may seem complex. Having the right partners and resources to navigate it is even more critical. If you need assistance with healthcare coverage options or need to learn more about deductibles, browse the eHealth platform or reach out to one of our insurance agents today.
A final caveat:
The examples above are only examples. Decisions like this are personal in nature. We generally don’t recommend that people not use their coverage to avoid paying toward their deductible, but we recognize there are occasions when it may make financial sense. The fact is that you never know when someone serious may happen. If it does, you’ll be glad for every dollar that you’ve already contributed toward your deductible already.
