Why You Can’t Afford to Put Off Paying Your Premium

News broke recently that former Beverly Hills, 90210 actress Shannen Doherty discovered she had invasive breast cancer that spread during a time when she was uninsured. Doherty is now suing her former business managers, claiming they mismanaged her money and let lapse the health plan she had through the Screen Actors Guild.

Few of us have business managers we can blame when the bills don’t get paid on time. But most of us can relate to the challenge of keeping up with monthly payments – and sometimes falling behind.

As Doherty’s situation highlights, failing to stay current with your health insurance premiums can lead to big problems in both getting and paying for medical care if you become injured or ill.

Here are 4 things to keep in mind when it comes to paying your insurance premiums:

1. You have a little breathing room. If you’re a little late on your bills, don’t panic. Insurers do offer you some breathing room.

If you bought your plan through your state’s health insurance marketplace, you have 90 days to pay your premium before your insurer will drop you from your plan. But note that to keep your plan, you’ll need to pay the full three months and become current before the 90 days are up.

If you buy insurance outside of the government-run marketplaces, carrier grace periods vary from 30 to 60 days before your plan is dropped, says Nate Purpura, vice president of communications with online broker, eHealth. Check with your health plan for details.

2. Don’t count on being reinstated. Once your insurance lapses, “You’re typically out-of-luck,” Purpura says.

Generally speaking there is no reinstatement once your insurance plan is dropped because you failed to pay your premiums on time, though some insurers may make an exception, Purpura says. In other words, don’t count on it, but it never hurts to ask.

3. Options outside of open enrollment. When you’re insurance is canceled outside of the annual open enrollment period, your options for coverage are limited. Failing to pay your premiums on time won’t qualify you for a special enrollment period.

But you can buy a short-term insurance policy at any time during the year. These plans are designed to provide temporary coverage, primarily to people who have a gap in insurance.
“These plans will cover anything new that happens to you – even breast cancer – until you reach the open enrollment period,” Purpura says.

However, unlike policies that comply with the Affordable Care Act, short-term won’t cover pre-existing health conditions. And, because they don’t count as qualified health insurance under the law, you may owe a tax penalty for going uninsured.

Another option is to get a supplemental health plan, such as for accident and critical illness. “For about $ 50 a month (combined) these plans can give you a cash payout if you have a qualifying accident or you’re diagnosed with a qualifying illness,” Purpura says.

4. Jump on open enrollment. The next open enrollment period will start on November 1, 2015 for insurance that takes effect January 1, 2016. That’s when you’ll be able to buy another health plan that complies with the law, and hopefully, fits within your budget.