A cancellation letter gives you a second chance to join a health insurance plan.
July 11, 2018 - By Hal Levy - 5 min read
It’s not your fault if your health plan dumps you. You’re simply free to choose a new health plan.
Should You Be Concerned That You Lost Your Health Plan?
The Affordable Care Act generally prevents major medical insurers from canceling plans. Insurers cannot dump you because you used too much coverage, or were rude on the phone.Individual plans close all the time. If your plan is canceled, there should be no consequences. You won’t be viewed poorly by other insurers. You won’t have to pay for your previous medical treatment (except in rare cases of fraud). However, living without any health insurance should concern you.
What Does A Health Insurance Cancellation Letter Look Like?
Any letter from an insurer that says your current health insurance plan will no longer be offered counts as a cancellation letter.Even if your letter includes an offer to join a new plan, you were still canceled on. Once you see that your plan is being shut down, it’s important to read your letter the whole way through.
The general rule is that you should get a cancellation notice from 90 to 180 days before your current coverage ends. This is plenty of time to join a new plan.
Choosing A New Plan Once Your Health Insurance Ends
Losing your plan entitles you to apply for insurance during a “Special Enrollment Period”. This means you’re automatically allowed to join any Obamacare health insurance plan.Consumer Reports writes that folks “have assumed they have no choice other than to accept the automatic, and usually more expensive, replacement the company selected for them. Nothing could be further from the truth.”
Other people have to wait until the short Open Enrollment Period at the end of each year to switch plans. But if your health insurance is canceled, you don’t have to wait.
When To Choose A New Plan: Mark your calendar! You can sign up for a new health insurance plan 45 days before your current coverage ends, or 60 days after your current coverage ends. That’s a total of 105 days to get a new health insurance plan.
Even if your plan hasn’t expired yet, you can sign up for new coverage in advance. This means that you don’t have to risk it without health insurance.
If you sign up for a new plan by the 15th of the month, that plan will begin on the 1st of next month. Health insurance plans usually cancel coverage on the last day of the month for this reason.
Keep Your Mail: Make sure to keep a copy of your cancellation letter. Your new insurance company may need to have proof that you qualify.
If you can’t find your cancellation letter, you can ask for a new copy. Your new plan should be able to give you a grace period to produce the letter.
Be Careful When Joining A New Plan: Health insurance companies generally must offer you the option to join one of their most similar plans if they cancel your plan.
Do not let them sign you up for a rip-off replacement plan!
Now that you’re free to choice any plan, use a comparison site like HealthCare.com to find the most appropriate and reliable coverage in your area.
Got A Health Insurance Cancellation Letter? Here’s What Happens If Your Health Plan Cancels On You
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