Obamacare: Pay for it every month, or lose coverage

Do you pay for Obamacare monthly or yearly? 

Checkbook Watcher

Dear Checkbook Watcher,

First, let’s be clear: “Obamacare” is private health insurance.  It is a contract between you and an insurance company, not between you and the government.  This is true even if the government is helping you pay for your health insurance.

You will get a monthly bill from the insurer for your share of the cost.  The government will also pay the insurer monthly, making up the difference between your share and the total cost.  Thus, you get the government subsidy immediately.  This is referred as the Advance Premium Tax Credit.

You have to pay your share of the bill each month, in order to be covered.  This is true even if your share is only a small amount ($5 or $10).

Some people are worried about having their medical bills show up before they have paid for their plan.  Therefore, the bill would be rejected because they are not covered (or at least not yet).  This could happen, but generally doctors and hospitals take weeks or months to send bills to the insurer.  Pharmacies, on the other hand, submit their bill immediately.  If you are late paying your bill, you may get tripped up at the drug store.

All of that is to say, make sure you pay your monthly bill if you want your coverage to continue.

Linda Riddell

About Linda Riddell

A published author and health policy analyst with 25 years’ experience, Linda Riddell's goal is to alleviate the widespread ailment of not knowing what your health plan can do for you.