With all of the changes surrounding our health care system lately, it is time to clear up a question we have been hearing: Does having bad credit affect your health insurance?
To answer that, we will need to make a clear distinction between the way health care insurers handled the process of providing coverage before the Affordable Care Act and how it is managed now.
Prior to the ACA, also known as Obamacare, insurers could rely on a variety of means to decide whether they would provide health coverage to an individual.
Things like pre-existing conditions, past health care insurance use, age, gender and even an individual’s credit score could all be used to determine eligibility.
In the past, people with bad credit who got denied health coverage had few options. Most states had programs that would cover those who could not get insurance otherwise. Although, those plans were often subpar and could be very expensive.
The network of doctors and hospitals that took these state insurance plans were few, and the premiums and deductibles were often prohibitive.
All of that is now changing with the Affordable Care Act. A big part of the reason the ACA was passed by Congress and made into law has to do with making health care insurance available for everyone.
“The more people who are covered,
the less expensive it will be.”
The costs would be spread over a larger pool of insured people, reducing each individual’s percentage of expenses.
As a part of this change, insurers would no longer be able to use the factors they had based their decisions on in the past.
That means no more denial based on your current health or on the condition of your credit score. That factor alone means millions of Americans with less than stellar credit are now eligible for affordable health care insurance.
To be sure, the ACA is not perfect, and the problems with getting the system fully functional are still being worked out. The fact of the matter is these problems will be worked out over time, and people will have greater access to affordable health care, regardless of their credit score.
So, just to be clear, the answer to whether having bad credit affects your health insurance is not anymore.
Photo Source: moritzlaw.osu.edu