Should I Cancel My Health Insurance? The Risks and Consequences Re-enrolling

Canceling health insurance midway is not a good idea at all. Leave alone the fact that you do not have any protection in case something goes wrong, there are several benefits which you will lose out on in case you cancel the current healthcare insurance plan and take up a new policy from scratch.

Here is a look at some of the problems you are likely to encounter:

The Impact of Cancellation

1. Waiting Period

When you have a well-run healthcare insurance plan, you have already qualified on different factors, which otherwise require you to go through a waiting period. This waiting period can extend to multiple years. This means that if you cancel your insurance and try to re-enroll, you will have to go through a waiting period, potentially losing protection in that time.

2. No-Claim Bonuses

As you continue using your current health insurance, you should have accumulated many no-claim bonuses. Gradually, people can accumulate many no-claim bonuses, which can help them get as much as double the coverage but continue to pay the same premium year after year. Canceling health insurance can nullify these benefits, leaving you at a disadvantage.

3. Pricing

When you are using an insurance plan you have already held for some time, the cost of that policy will always be lower than what you will pay on a new plan. This means that re-enrolling can lead to a situation where you get fewer features at a higher price. You will have to pay more to get the same level of coverage or fewer benefits than what you currently have.

4. Proration and Financial Impact

You already have something going well, and by canceling your current healthcare plan, you will only get some prorated amount back in your hand. The money you get in your hand by canceling your existing policy can never make up for the extra payment you will have to shell out when you re-enrol. Moreover, the benefits and features you currently enjoy might not be available when you re-enroll.

Additional Concerns During Re-enrollment

Be very very careful about this and hope when you sign back up that your insurance doesn’t want a medical examination on you. If you have pre-existing conditions at this point, it could lead to issues. Many insurance companies can refuse coverage for pre-existing conditions when you try to re-enroll. This means that even if you cancel your health insurance, your past health conditions may prevent you from getting the coverage you need.

You might not be re-enrolled without proof of insurability. If your pre-existing conditions are severe, you might not qualify for coverage. This could leave you in a vulnerable position, especially if your health worsens due to lack of medical care.

Many insurance companies give some sort of reward for long term customer loyalty. You will lose that. When you cancel your health insurance, you will lose any rewards or discounts that come with being a long-term customer. This can add to the financial burden when you have to find a new provider and policy.

Conclusion

In conclusion, canceling your health insurance should only be a last resort. It is important to thoroughly review your current plan and consider the potential impacts of cancellation and re-enrollment before making any decisions. Always consult with a professional to understand the full implications and to explore your options.