Do You Pay a Fee for Not Having Health Insurance? Here’s How It Works Now

For many people, “What is the fee for not having health insurance?” is really two questions in one:

1. Is there a penalty or tax if I don’t have coverage?
2. Even if there’s no formal fee, what are the financial risks of going without health insurance?

This guide breaks both of those down in clear, practical terms so you understand what you might owe now, what could happen at tax time, and what’s at stake if you’re uninsured and get sick or injured.

Is There Still a Federal Fee for Not Having Health Insurance?

In the United States, the answer today is:

Under the Affordable Care Act (ACA), there used to be an individual mandate that required most people to have health insurance or pay a penalty on their federal tax return. That penalty amount was gradually phased out and was effectively reduced to $0 starting in 2019.

What this means in practice:

• You do not owe a federal “shared responsibility payment” if you are uninsured for all or part of the year.
• When you file your federal taxes, you will not be charged a federal fee solely for lacking health insurance.

However, that’s not the end of the story—some states have created their own rules.

State-Level Penalties: Where You Might Still Pay a Fee

While the federal government no longer charges a fee, several states and jurisdictions have their own health insurance mandates. In these places, you may pay a state penalty if you don’t have qualifying coverage and don’t qualify for an exemption.

States and jurisdictions that have, in recent years, put their own individual mandates in place include:

• California
• Massachusetts
• New Jersey
• Rhode Island
• Vermont (individual mandate without a monetary penalty in some years)
• District of Columbia (Washington, DC)

Because rules can change, it’s important to check your current state regulations or speak with a tax professional for the most up-to-date details.

How State Penalties Generally Work

Each state sets its own rules, but most follow a similar structure:

• A flat dollar amount per uninsured adult and child in your household
  and/or
• A percentage of your household income, up to a cap

The penalty is usually:

• Calculated when you file your state income tax return
• Prorated by the number of months you were uninsured
• Waived or reduced if you qualify for a specific exemption (such as low income, short gap in coverage, or hardship)

Common State Exemptions

Many states with mandates allow exemptions for:

• Very low income households
• Short coverage gaps (often less than 3 consecutive months)
• Certain life events or hardships, such as:
  • Eviction
  • Domestic violence
  • Recent natural disaster
• Religious exemptions in some jurisdictions
• Unaffordable coverage based on state-defined thresholds

If you live in a state with an individual mandate, it can be helpful to:

1. Confirm whether the mandate currently applies.
2. Learn what counts as qualifying coverage.
3. Check whether you might qualify for an exemption.

Quick Summary: Federal vs. State Penalties

Below is a simple overview of how fees for being uninsured are typically handled:

Even if you don’t face a legal penalty, going without health insurance can create significant personal financial risk, which is often much greater than any past or present fee.

The Real “Cost” of Not Having Health Insurance

Even where there is no official fee or tax penalty, many people find that being uninsured can be far more expensive if they need medical care.

Here are the main financial risks:

1. You Pay Full Price for Care

Without insurance, you are typically charged the full, undiscounted rate for:

• Emergency room visits
• Hospital stays
• Surgeries and procedures
• Lab tests and imaging
• Follow-up care

Hospitals and clinics often have negotiated lower prices with insurance companies. If you are uninsured, you usually do not benefit from those negotiated rates and may be billed at higher amounts.

2. One Emergency Can Create Large Debt

A single unexpected event—such as:

• A broken bone
• An appendectomy
• A sudden serious illness

can easily result in medical bills that are difficult or impossible to pay out of pocket for many households.

Even though some hospitals offer payment plans or financial assistance programs, many people without insurance still experience:

• High-interest medical debt
• Collections activity
• Potential impact on credit scores

3. Limited Access to Some Types of Care

Many people without insurance report that they:

• Delay or skip preventive care or routine visits
• Have a harder time finding specialists who accept self-pay patients
• Face higher out-of-pocket costs for prescription drugs

Over time, delaying care may lead to more serious and more expensive health problems, even if it avoids upfront costs.

4. Unpredictable Expenses

One major drawback of going without coverage is uncertainty. While insurance usually involves:

• A monthly premium
• Deductibles and copays

it also offers some protection against very high costs, often through an out-of-pocket maximum—a cap on how much you pay in a year for covered services.

Without insurance, there is no cap on what you might pay for medical treatment.

When You Might Not Face a Penalty (But Still Need to Weigh Risks)

Even in states with mandates, many people do not end up paying a penalty because they meet certain conditions. Examples commonly include:

• Income is below a threshold where coverage is considered unaffordable.
• You experienced a brief gap in coverage, often less than a set number of months.
• You had a qualifying hardship.
• You lived outside the state or were incarcerated during the year.
• You are part of a group that qualifies for a religious or other specific exemption.

It can be easy to assume that “no penalty” means “no problem,” but the financial risk of a medical emergency is still present even if you legally owe nothing for being uninsured.

How to Check Whether You’ll Owe a Fee

If you’re trying to understand your specific situation, you can usually find answers by:

1. Identifying your state’s rules

   • Look up whether your current state of residence has an individual mandate.
   • Confirm whether there is currently a monetary penalty.

2. Reviewing your coverage months

   • List which months you had qualifying health insurance (through an employer, government program, marketplace plan, or other recognized coverage).
   • Note any gaps in coverage.

3. Seeing if an exemption might apply

   • Check common categories like low income, short gaps, or hardship.
   • Many state tax forms include a section listing specific exemption codes.

4. Asking a tax or benefits professional

   • A licensed tax preparer or benefits navigator can clarify:
     • Whether a fee applies in your state
     • How much the penalty might be
     • Whether you might qualify for any exemptions

What Counts as “Having Health Insurance” for Penalty Purposes?

When states apply a penalty, they generally look for whether you had “minimum essential coverage”. While definitions vary by location, coverage often counts if it comes from:

• Employer-sponsored health insurance
• Individual or family plans purchased through a health insurance marketplace
• Certain off-marketplace individual plans (depending on the state)
• Medicaid or Children’s Health Insurance Program (CHIP)
• Medicare
• Many student health plans
• Certain types of TRICARE or VA coverage

Some limited-benefit products (for example, stand‑alone dental plans, accident-only policies, or discount cards) usually do not count as full health insurance for penalty purposes.

Balancing the Cost of Coverage vs. the Cost of Being Uninsured

For many people, the core question is really:

There is no single right answer, but these are common considerations:

Potential Costs of Having Health Insurance

• Monthly premium (what you pay to keep the plan active)
• Deductible (what you pay before the plan starts covering many services)
• Copayments and coinsurance (your share of the costs for visits, tests, and medications)
• Non-covered services, depending on the plan’s benefits

Potential Costs of Not Having Health Insurance

• State penalty (if you live in a state with a mandate and don’t qualify for an exemption)
• Full cost of medical care if you get sick or injured
• Unpredictable bills, including emergency and hospital charges
• Possible medical debt and related financial strain

Many people weigh whether they could handle:

• A predictable monthly cost (premium and typical out-of-pocket expenses),
  versus
• The uncertain but potentially very high cost of an unexpected medical event.

Practical Tips If You’re Currently Uninsured

If you don’t have health insurance right now and are concerned about penalties or costs, these steps can help you navigate your options:

1. Check if you qualify for low-cost or no-cost coverage

   • Many people discover they are eligible for programs like Medicaid or for subsidized marketplace plans based on their income and household size.

2. Look at marketplace open enrollment and special enrollment periods

   • Losing other coverage, moving, getting married, or having a baby can sometimes give you a special window to sign up for a plan.

3. Ask providers about self-pay discounts

   • Some clinics and hospitals have discounted cash prices, sliding scales, or financial assistance programs for people without insurance.

4. Plan ahead for emergencies

   • While no one can predict the future, understanding how your local hospitals handle uninsured patients and what assistance they may offer can reduce uncertainty.

5. Revisit your situation regularly

   • Income, employment, and family circumstances change.
   • Revisiting your options at least once a year can help you avoid both surprise penalties and avoidable financial risk.

Key Takeaways: What Is the Fee for Not Having Health Insurance?

To directly answer the core question:

• There is no current federal fee or penalty in the U.S. solely for not having health insurance.
• Some states and Washington, DC do charge a state-level penalty if you go without qualifying coverage and do not qualify for an exemption.
• Even without a legal penalty, the financial risk of being uninsured—especially in the event of an emergency or serious illness—can be very high.
• Understanding your state’s rules, your coverage options, and your financial situation can help you make an informed decision about whether to remain uninsured or seek a health plan.

Once you know whether you could face a state fee and what medical costs you might be exposed to without coverage, you can more clearly see the true cost of going without health insurance and decide what makes the most sense for you and your household.