What a Health Insurance Cancellation Letter Really Means

July 26, 2021
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3-minute read

When you received your health insurance cancellation letter, it may have come as a surprise. Luckily, it’s not as bad as it might seem. You’ve got plenty of time to take action, replace your policy, and ensure you have health coverage.

HealthMarkets can help explain:

  • Why this happened and how it can affect your coverage
  • What you can do to reapply and when
  • Where you can turn for help

Why Did This Happen? How Can It Affect Your Coverage?

While the insurance cancellation letter may appear unexciting, it’s worthwhile to read it from top to bottom. But, essentially getting an insurance cancellation letter (or non-renewal notice) means that your insurance is being terminated—often due to no fault of your own. Many companies leave the individual health insurance market entirely or discontinue certain plans for a variety of business reasons. The unfortunate news is that there is nothing you can do to renew your previous plan.

The good news is that despite the inconvenience of reapplying for health insurance, you may actually have better options available than you did before.

Essential Health Coverage

Insurance companies are not allowed to deny or exclude coverage for any pre-existing conditions. In fact, all health insurance plans (“qualified health plans”) are required to include 10 essential benefits as mandated by the Affordable Care Act (ACA):

  1. Outpatient care
  2. Emergency services
  3. Hospitalization
  4. Maternity care and newborn care
  5. Mental health and substance use disorder services
  6. Prescription drugs
  7. Rehabilitative and habilitative services
  8. Laboratory services
  9. Preventive and wellness services
  10. Pediatric services, including oral and vision care

It’s possible that your insurance cancellation letter included some new policy options available to you.

But don’t forget that you do have options and time to shop around to get the best bang for your buck. HealthMarkets can help you compare health plans. No matter what, any plan you apply for will cover at least those 10 things.

What You Can Do (and When)

If you’re familiar with the ACA Open Enrollment Period, you may be aware that it occurs during a fixed window of time each year. Generally, if you’ve missed this window, then you cannot apply for a plan until the following year. This does not apply to you.

The ACA extends Special Enrollment Periods (SEPs) to individuals who experience certain “qualifying life events.” So, what counts as a qualifying life event? To name just a few:

  • Getting married
  • Having a baby
  • Relocating out of state
  • Losing your health coverage

Your insurance cancellation letter may count as a qualifying life event, which means it triggered your very own SEP. In this scenario, you may have the option to apply for a replacement policy. But it’s still a limited window of time you’re restricted to.

Details About Your SEP

Special Enrollment Periods usually provide a 60-day window following an event.1 That means you can replace your policy before it ever expires or, if you want, you can wait. In either situation, HealthMarkets can help you compare your options.

If your insurance cancellation letter indicates that you’ve already lost coverage, your new coverage can start the first day of the month that occurs after you pick a plan if your premium is paid.

If your insurance cancellation letter indicates that you’ll lose your health coverage in the near future, your new coverage can start the first day of the month after your prior coverage ends and you pick a plan, as long as your premium is paid.

Don’t forget to mark your calendar. The 60-day window may come and go pretty quickly if you’re not paying attention.

Your Next 5 Steps

  1. Read your insurance cancellation letter.
  2. Know your effective date of cancellation.
  3. Mark your calendar.
  4. Contact a licensed insurance agent to find the right coverage for your needs.
  5. Apply for new coverage with HealthMarkets.

ACA Subsidies

You might even qualify for an ACA subsidy, also known as a premium tax credit. Tax credits can be used to lower the cost of your premiums, and many Americans could qualify for premiums as low as $0.2*

Where You Can Turn for Help

HealthMarkets understands that there is no right time to receive a health insurance cancellation letter. We can help you minimize the inconvenience and compare your coverage options. With access to recognized insurance companies and thousands of plans nationwide, HealthMarkets can help find the right plan for you and your loved ones.

Begin comparing health plans with a licensed insurance agent today. Just call  (855) 217-0749.

 

1. Special Enrollment Period (SEP), HealthCare.gov. Retrieved from https://www.healthcare.gov/glossary/special-enrollment-period/. Accessed April 9, 2021. | 2. New York Times. March 10, 2021. Retrieved from https://www.nytimes.com/2021/03/10/upshot/stimulus-obamacare-lower-costs.html

 

* Those with incomes between 100% and 150% of the federal poverty level (FPL) may qualify for a zero-dollar premium silver plan (after tax credits). They may also qualify for a zero-dollar premium bronze plan (after tax credits). Cost sharing (deductibles and coinsurance) may vary.

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