I'm not sure if I should discontinue my health insurance or not.
January 30, 2013 4:27 PM Subscribe
I'm not sure if i should discontinue my health coverage or not, and how to handle it - and if there's any way to *temporarily* discontinue my health coverage.
I am a freelancer, on Freelancers Union insurance based in New York - I finally got my own health insurance this past December, with the understanding that my parents would help me financially cover part of my insurance.
Two things have left me thinking I need to discontinue, at least temporarily, my insurance. Those two things are:
1. Ends up I'm getting zero financial assistance from my parents.
2. In calculating how much I'm going to need to pay in taxes as a freelancer without a payroll, there's just no way for me to both owe all I need for 2012 and still purchase insurance for February, March, and April. (I owed back-taxes for 2011 and am still paying it back in an installment agreement, so having this happen two years in a row is, I think, a non-starter.)
So what do I do? Is there any way to *temporarily* discontinue coverage? By discontinuing coverage, am I making it impossible to start back later on? I have a throwaway email for any questions, at haveaninsurancequestion@gmail.com - thank you so much for your help.
I am a freelancer, on Freelancers Union insurance based in New York - I finally got my own health insurance this past December, with the understanding that my parents would help me financially cover part of my insurance.
Two things have left me thinking I need to discontinue, at least temporarily, my insurance. Those two things are:
1. Ends up I'm getting zero financial assistance from my parents.
2. In calculating how much I'm going to need to pay in taxes as a freelancer without a payroll, there's just no way for me to both owe all I need for 2012 and still purchase insurance for February, March, and April. (I owed back-taxes for 2011 and am still paying it back in an installment agreement, so having this happen two years in a row is, I think, a non-starter.)
So what do I do? Is there any way to *temporarily* discontinue coverage? By discontinuing coverage, am I making it impossible to start back later on? I have a throwaway email for any questions, at haveaninsurancequestion@gmail.com - thank you so much for your help.
Are you in general in good health? Don't need any expensive medications? Fine with paying cash if you have to go to urgent care? Pretty careful in general? How long were you without insurance before, and was there any downsides to that period?
Have you tried contacting the IRS to arrange a lower payment plan?
I think you should only cancel insurance if you are having to chose between that, and say food or rent. Is there anything at all in your expenses or budget you can reduce, if keeping insurance is important?
posted by shinyshiny at 5:00 PM on January 30, 2013
Have you tried contacting the IRS to arrange a lower payment plan?
I think you should only cancel insurance if you are having to chose between that, and say food or rent. Is there anything at all in your expenses or budget you can reduce, if keeping insurance is important?
posted by shinyshiny at 5:00 PM on January 30, 2013
In addition to the crucial (most important) point made by brainmouse, it's very important to try to avoid going without what's termed as a "significant lapse in creditable coverage". If you have a break in coverage of 63 days it helps insurance companies screw you over in terms of what they will cover you for when you pick the coverage back up again ("pre-existing conditions"). You may think you do not have any of these but you can be diagnosed with something at any time that will end up costing you big time. The Obamacare provision for pre-existing condition coverage is meant to go into effect Jan 1, 2014, but I wouldn't count on it happening until it really happens. I do not recommend discontinuing your health coverage unless the situation is truly dire.
posted by treehorn+bunny at 6:41 PM on January 30, 2013 [5 favorites]
posted by treehorn+bunny at 6:41 PM on January 30, 2013 [5 favorites]
Going to echo the existing trend -- not to sound irresponsible, but falling behind on taxes is not even in the same realm of badness as needing healthcare without insurance. Anyone can break a leg tomorrow, or worse. Which will cost orders of magnitude more than IRS penalties.
You are far better off negotiating a payment plan with the IRS than with a hospital.
posted by thebordella at 4:15 AM on January 31, 2013 [1 favorite]
You are far better off negotiating a payment plan with the IRS than with a hospital.
posted by thebordella at 4:15 AM on January 31, 2013 [1 favorite]
There definitely is not a way to temporarily discontinue individual (non-group) insurance and be guaranteed of getting it back at the same price, or of getting it back at all. One wrinkle is that Freelancers Union offers both referrals to individual insurance (in non-NY states, these plans are administered by Golden Rule) as well as group insurance itself (in NY state). If you're in the group plan--for which you would have had to pay an extra $50 application fee, and $75 "annual access fee"--you are likely to be much more protected in terms of being able to get back on, although you'd want to talk to the folks at Freelancers Union to make sure they don't lock people out of coverage for a certain period of time after discontinuing payment.
All in all, though, even if you *could* drop your insurance for three months, I don't think it's a good idea. I'd encourage you to revisit this assumption:
In calculating how much I'm going to need to pay in taxes as a freelancer without a payroll, there's just no way for me to both owe all I need for 2012 and still purchase insurance for February, March, and April. (I owed back-taxes for 2011 and am still paying it back in an installment agreement, so having this happen two years in a row is, I think, a non-starter.)
Almost everyone that I have ever talked to in this situation has said that the IRS bends over backwards to help people with cash-flow issues who can't pay their taxes all at once. I personally know a couple who are self-employed and have done exactly what you're talking about, having concurrent installment agreements running for two (in fact, more than two!) years of taxes in a row. It's so easy to call up the IRS and talk to them about whether this is possible, you should certainly do that before dropping insurance, which runs a very real risk of being a decision you can't reverse.
posted by iminurmefi at 6:42 AM on January 31, 2013
All in all, though, even if you *could* drop your insurance for three months, I don't think it's a good idea. I'd encourage you to revisit this assumption:
In calculating how much I'm going to need to pay in taxes as a freelancer without a payroll, there's just no way for me to both owe all I need for 2012 and still purchase insurance for February, March, and April. (I owed back-taxes for 2011 and am still paying it back in an installment agreement, so having this happen two years in a row is, I think, a non-starter.)
Almost everyone that I have ever talked to in this situation has said that the IRS bends over backwards to help people with cash-flow issues who can't pay their taxes all at once. I personally know a couple who are self-employed and have done exactly what you're talking about, having concurrent installment agreements running for two (in fact, more than two!) years of taxes in a row. It's so easy to call up the IRS and talk to them about whether this is possible, you should certainly do that before dropping insurance, which runs a very real risk of being a decision you can't reverse.
posted by iminurmefi at 6:42 AM on January 31, 2013
Don't drop the healthcare coverage. If you want an anecdote, I had a three month gap between jobs last fall. I am healthy. In the prior 15 years, I'd only visited the doctor for check-ups, one sinus infection, and to have a wart removed (in the meantime spending tens of thousands of dollars on insurance). I seriously considered going without insurance during that gap, but opted to self-insure with a one-step-up from catastrophic policy. Those three months encompassed the only time that I've really needed healthcare, culminating in a trip to the ER. Although it galls me a bit that it all happened during the only time span in my adult life when I haven't had excellent insurance, it kept the bills manageable. They wouldn't have been, had I been uninsured, plus, I probably would have put off the ER trip, which might have been actually catastrophic.
posted by Kriesa at 6:51 AM on January 31, 2013
posted by Kriesa at 6:51 AM on January 31, 2013
You can owe 2 years taxes in a row and get a payment plan for it. Just call the IRS. You should keep your insurance!
posted by The Light Fantastic at 8:56 AM on January 31, 2013
posted by The Light Fantastic at 8:56 AM on January 31, 2013
The answer to the question, "Do I need health insurance in the US?" is ALWAYS "Yes." Full stop.
posted by magnetsphere at 1:19 PM on January 31, 2013
posted by magnetsphere at 1:19 PM on January 31, 2013
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posted by brainmouse at 4:43 PM on January 30, 2013 [13 favorites]