Since the Affordable Care Act took effect in some parts of the world having health insurance has become less of an option and more of a necessity.  The law requires you to have sufficient health coverage and if you do not have this you can be liable to pay a penalty.

So it’s not so much a choice to be made but a law to follow when it comes to health insurance. If you do not have it the penalty payable in 2014 is either 1% of your annual income or $95, whichever is higher.

The penalty rises each year; in 2016 it will be 2.5% of your annual income, or $695. The requirement to have sufficient health insurance applies to the majority of individuals, with a few exceptions.

So What Happens if You Don’t Have Health Coverage?

Aside from people who fall under the exception rules, if you do not have health insurance not only will you have to pay a penalty but you will not be covered for your health care if and when you need it.

It should be noted that you need to ensure that you have full coverage. Policies that cover specific areas of health, such as coverage for a particular illness, or help with costs such as dental care, are not considered to be sufficient health care provision. The HBF life insurance page is another helpful resource that can help answer your questions.

What Kind of Health Care is Best?

Given that you really need sufficient health care coverage you’ll need to decide what kind of health care suits you best.

Health Maintenance Organizations (HMOs)

Your premiums are likely to be lower with HMOs, and there is little paperwork, but you are restricted to health care providers who are within the network provided by the plan. If you have a specialist care provider this can make it difficult to receive coverage. However, you do get a primary care provider who can refer you to a specialist if necessary and you will be covered. With this coverage you will pay:

  • A premium
  • No deductible
  • A copay for each care type you receive


Preferred Provider Organizations (PPOs)

With PPOs you have more flexibility with your choice of health care professionals, but you will pay more and you will have to complete more paperwork. You will pay:

  • A premium
  • A deductible for some PPOs
  • Copay or coinsurance
  • Additional costs if your health care provider charges more than the insurance covers

Point-of-Service Plan (POS)

This is a combination of parts of an HMO with parts of a PPO.  Under a POS you have a certain amount of say over what health care professional you use, and you have out of pocket expenses that you can keep control of. You may have to complete more paperwork if you choose to see a physician outside of the network defined by the plan. You will pay:

  • A premium
  • A deductible that is higher if you choose a professional outside of the network.
  • Copay or coinsurance that is higher if you choose a professional outside of the network.

It is important to choose the right type of health insurance based on your personal needs. And, if you haven’t already done so, be sure to choose a plan immediately to avoid penalties or, worse yet, having to pay doctor and hospital fees out of your own pocket. A few days in the hospital can easily cost you thousands of dollars. Why drain your savings account when, with proper coverage, those costs can be paid for you?