Health insuranceis expensive, so why not just wait and buy coverage when you need it? Why pay months ofpremiumswhen you might not need to use it?
SinceAffordable Care Act(ACA) rules require health insurers to coverpre-existing conditions, it may seem cheaper and safe to delay buying coverage until you need it. But, there are compelling reasons not to wait.
This article will explain why you’ll generally find yourself out of luck if you go without health coverage and then try to enroll if and when you’re in need of medical care.
David Lees / Getty Images
Open Enrollment Isn’t Open-Ended
Unless you experience a qualifying event, described below in more detail, you can only buy health insurance in the individual/family market (which includes through thehealth insurance exchangesas well asoutside the exchanges) duringopen enrollment. This is a period of time when everybody can buy health insurance.
If you don’t buy your health insurance during open enrollment, you’ll have to wait until the next year’s open enrollment for another opportunity. If you get sick in the meanwhile, you’ll probably be out of luck.
In most states, the open enrollment period for individual/family (self-purchased) health insurance runs from November 1 to January 15, although there are somestate-run exchangesthat have different deadlines.
If you work for an employer that offers health insurance, you’re also limited to signing up during open enrollment. And open enrollment for employer-sponsored plans is generally quite a bit shorter than the window that applies in the individual market. Employers can set their own open enrollment windows—there’s no set schedule the way there is for the individual market. They usually occur in the fall, for coverage starting January 1, but employer-sponsored plans can have plan years that differ from the calendar year, so you may find that your employer conducts open enrollment at a different time of the year.
One way or the other, your opportunity to sign up for the coverage your employer offers is going to be limited to a short window each year. You’re not going to be able to wait until you need medical care to sign up for health insurance.
Exceptions to Open Enrollment
Certain situational changes in your life (but not changes in your health status) will create aspecial enrollment periodduring which you can buy health insurance or change your health plan. Special enrollment periods apply to employer-sponsored coverage as well as coverage that you buy on your own.
Qualifying events for individual market coverage include:
For employer-sponsored plans, qualifying events are similar, but there are some that differ.Here’s an overviewof how special enrollment periods work for employer-sponsored coverage, andhere’s the Code of Federal Regulationsthat governs special enrollment periods for employer-sponsored coverage.
Special enrollment periods are time-limited. For employer-sponsored plans, you’ve generally only got 30 days from the qualifying event to enroll (60 days if the event is the loss of Medicaid). In the individual market, you’ll have 60 days, and some qualifying events trigger an enrollment window both before and after the event. But if you don’t sign up during the applicable window, you’ll have to wait for the next open enrollment period.
Health Insurance Waiting Periods
Health insurance coverage doesn’t take effect the day you buy it. Whether you’re insured through work or through a plan your purchased in the health insurance exchange, there is usually a waiting period before your coverage kicks in. For example:
Short-term health insurance can take effect as soon as the day after you purchase it. But as we’ll discuss in a moment, short-term health insurance generally will not cover any pre-existing conditions. So it won’t work as a coverage solution once you’re in need of medical care.
Health Insurance for Unforeseen Circumstances
It’s not a good idea to wait to buy health insurance until you need to use it. Even if you’re young and healthy, bad things can still happen.
What if you sliced your hand when a wine glass broke as you were washing it? Stitches in an emergency room can be very expensive. What if you tripped over the cat while walking downstairs? A broken ankle can’t wait for treatment and might even require surgery.
Even if something like this happens when you’re able to enroll in coverage right away (during open enrollment or during a special enrollment period), your coverage wouldn’t take effect right away. It’s doubtful that you’d want to wait around for weeks to go to the emergency room.
And if your unforeseen circumstance occurred outside of open enrollment and when you’re not eligible for a special enrollment period, you’d potentially have to wait months just to enroll.
Health Insurance Is More Affordable Than You Might Expect
The most common reason people give for not having health insurance is that it’s too expensive. But the ACA has helped to make coverage much more affordable for people with low and mid-range incomes. And from 2021 through 2025, the American Rescue Plan andInflation Reduction Acthave enhanced the ACA’s subsidies, making self-purchased coverage even more affordable.
If your income is less than about $20,120 (for a single individual in the continental U.S.), you may qualify for Medicaid in 2023. This income limit increases each year within a few months of the newfederal poverty level amountsbeing released.
Note that children and people who are pregnant can qualify for Medicaid with significantly higher income levels, as detailed inthis chart.
If your income is too high for Medicaid, you may be eligible forpremium subsidiesto cover a portion of your premium in the exchange/Marketplace. These subsidies are normally only available to people with income up to four times the poverty level (based on the prior year’s poverty level numbers). But the American Rescue Plan removed this limit for 2021 and 2022, and the Inflation Reduction Act extended that provision through 2025.
Under the temporary new rules, people are expected to pay a set percentage of their income for the benchmark plan’s premium, and it’s capped at 8.5% of income, regardless of how high an applicant’s income is (for people with lower incomes, the percentage of income they have to pay for the benchmark plan is lower).
To qualify for subsidies, you must buy your health insurance through the exchange. You can either take the subsidies up-front, paid directly to your insurance carrier throughout the year, or you can pay full price for your coverage and then claim your subsidy on your tax return.
Prior to 2023, some families found themselves unable to obtain affordable health coveragedue to the “family glitch.” Some employers offer affordable coverage to their employees, but the cost to add family members can be quite expensive. Before 2023, those family members were ineligible for subsidies in the exchange/Marketplace. But the rules were changed in 2023, resulting in some employees' family members becoming newly eligible for Marketplace subsidies.
So if your employer-sponsored family health coverage feels unaffordable, it’s worth your while to check to see if your family members might qualify for subsidies to cover part of the cost of Marketplace coverage.
Catastrophic Plans
If you’re younger than 30 years old, or if youqualify for a hardship exemption(which includes affordability exemptions), you may be eligible for acatastrophic health plan. Although these plans have the highest deductibles and out-of-pocket costs allowed under the ACA, their premiums are lower than the other available options, and at least you’ll have some coverage.
And just like any othermajor medicalhealth plan, catastrophic plans can only be purchased during open enrollment or a special enrollment period.
What About Short-Term Health Insurance?
Short-term health insurance is available for initial terms of up to a year in quite a few states, with some plans available to renew for total durations of up to 36 months.
But nearly all short-term health plans have blanket exclusions on pre-existing conditions. The insurer canreject your application altogether based on your medical history. But even if they accept you, the plan is going to include fine print noting that they’re not going to cover any medical issues that you were experiencing before your plan took effect.
And post-claims underwriting is common on short-term plans. That means the insurer asks just a few general medical questions when you enroll, and policies are issued without the insurer doing a review of your medical history. But if and when you have a claim, the insurer can then comb through your medical records to see if there’s any way the current claim is related to a pre-existing condition. If it is, they can deny the claim (this doesn’t happen with ACA-compliant plans, because they cover pre-existing conditions).
So a short-term plan is not going to be a solution if you’re hoping to wait until you need medical care and then purchase coverage at that point.
Summary
With the exception of Medicaid/CHIP, you can only enroll in most health insurance policies during limited enrollment windows—either an annual open enrollment period or a special enrollment period stemming from a qualifying life event.
So people cannot wait until they’re sick and then purchase coverage. In most cases, that strategy will result in a potentially months-long wait until coverage takes effect, making it impractical in terms of having access to care for the medical condition that has arisen. Instead, the best approach is to maintain continuous coverage, even when healthy, so that coverage is already in place if and when a medical need arises.
A Word from Verywell
Like any insurance product, health insurance only works when enough claim-free or low-claim individuals are in the pool to balance out the cost of the high-claim individuals. This is why it’s so important to maintain health insurance even when you’re perfectly healthy. It’s not just yourself you’re protecting, it’s the whole pool. And you never know when you might need the pool to be there for you—the healthiest among us can become a high-claim individual in the blink of an eye.
8 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Norris, Louise. healthinsurance.org.What are the deadlines for Obamacare’s open enrollment period?Norris, Louise, healthinsurance.org.Does pregnancy trigger a special enrollment period?U.S. Department of Labor.FAQs on HIPAA Portability and Nondiscrimination Requirements for Workers.Cornell Law School, Legal Information Institute.29 CFR § 2590.701-6 - Special enrollment periods.U.S. Department of Health and Human Services.Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plan. May 14, 2020.KFF.Status of State Action on the Medicaid Expansion Decision.Norris, Louise. healthinsurance.org.How the American Rescue Plan will boost marketplace premium subsidies. March 5, 2021.U.S. Department of the Treasury.Affordability of Employer Coverage for Family Members of Employees.
8 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Norris, Louise. healthinsurance.org.What are the deadlines for Obamacare’s open enrollment period?Norris, Louise, healthinsurance.org.Does pregnancy trigger a special enrollment period?U.S. Department of Labor.FAQs on HIPAA Portability and Nondiscrimination Requirements for Workers.Cornell Law School, Legal Information Institute.29 CFR § 2590.701-6 - Special enrollment periods.U.S. Department of Health and Human Services.Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plan. May 14, 2020.KFF.Status of State Action on the Medicaid Expansion Decision.Norris, Louise. healthinsurance.org.How the American Rescue Plan will boost marketplace premium subsidies. March 5, 2021.U.S. Department of the Treasury.Affordability of Employer Coverage for Family Members of Employees.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Norris, Louise. healthinsurance.org.What are the deadlines for Obamacare’s open enrollment period?Norris, Louise, healthinsurance.org.Does pregnancy trigger a special enrollment period?U.S. Department of Labor.FAQs on HIPAA Portability and Nondiscrimination Requirements for Workers.Cornell Law School, Legal Information Institute.29 CFR § 2590.701-6 - Special enrollment periods.U.S. Department of Health and Human Services.Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plan. May 14, 2020.KFF.Status of State Action on the Medicaid Expansion Decision.Norris, Louise. healthinsurance.org.How the American Rescue Plan will boost marketplace premium subsidies. March 5, 2021.U.S. Department of the Treasury.Affordability of Employer Coverage for Family Members of Employees.
Norris, Louise. healthinsurance.org.What are the deadlines for Obamacare’s open enrollment period?
Norris, Louise, healthinsurance.org.Does pregnancy trigger a special enrollment period?
U.S. Department of Labor.FAQs on HIPAA Portability and Nondiscrimination Requirements for Workers.
Cornell Law School, Legal Information Institute.29 CFR § 2590.701-6 - Special enrollment periods.
U.S. Department of Health and Human Services.Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2021; Notice Requirement for Non-Federal Governmental Plan. May 14, 2020.
KFF.Status of State Action on the Medicaid Expansion Decision.
Norris, Louise. healthinsurance.org.How the American Rescue Plan will boost marketplace premium subsidies. March 5, 2021.
U.S. Department of the Treasury.Affordability of Employer Coverage for Family Members of Employees.
Meet Our Medical Expert Board
Share Feedback
Was this page helpful?Thanks for your feedback!What is your feedback?OtherHelpfulReport an ErrorSubmit
Was this page helpful?
Thanks for your feedback!
What is your feedback?OtherHelpfulReport an ErrorSubmit
What is your feedback?
