Key takeaways:
Every insurance option available to you may be unaffordable.
You may become a cash-pay healthcare consumer intentionally or by default. This could happen if you lose coverage, have sporadic coverage, are underinsured, or usually don’t have insurance.
If you can’t afford insurance and go without a plan, you have many healthcare options.
Recent price increases on living expenses have significantly affected people’s lives. Healthcare is no exception. As a result, many people are dropping health insurance that’s unaffordable for them.
But health insurance isn’t the only way to pay for healthcare. People who are uninsured pay for all their healthcare costs out of pocket. They’re known as cash-pay or self-pay healthcare consumers. This option can be daunting for people with serious conditions, such as cancer. But there are ways to navigate costs without health insurance while avoiding medical debt.
Here’s how you can drop your insurance and handle healthcare costs when your coverage ends.
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How to cancel health insurance
You can cancel your health insurance by contacting your insurer or stopping your premium payments. Here are some steps you can take to end your health coverage:
Know the open enrollment period. Open enrollment is the time of year you can join, change, cancel, or decline health insurance for the coming year. For employer-sponsored plans, this is usually in the fall. The next coverage year often begins January 1.
Decide whose health insurance you’re canceling. Determine if you want to stop coverage for yourself or for everyone your plan covers. This is especially important if you’re canceling COBRA insurance.
Decide if you’re leaving all your plans. Determine what part of your coverage you want to stop. You may want to drop a comprehensive healthcare plan. Alternatively, you may opt to cut only prescription, dental, or vision coverage.
Find out when you can cancel coverage. If you have an employer or group plan, you typically need to have a qualifying life event or change employers to cancel coverage. If you have a Medicare Advantage plan, you can drop coverage during Medicare open enrollment, Medicare Advantage open enrollment, or a special enrollment period (SEP). For instance, you can leave a stand-alone Medicare Part D plan during Medicare open enrollment or an SEP. If you have an Affordable Care Act (ACA) marketplace plan, you can call your insurance company or the marketplace where you bought your plan. You can also log in to your marketplace account and cancel.
Stop paying your premium. An insurance plan can be canceled by the insurance company if you don’t pay the premium.
Know your last day of coverage. If you don’t sign up for health insurance or renew during open enrollment, the last day of your plan is often December 31. If you cancel during the coverage year, your insurance may end the last day of the month you cancel or the last day of the following month.
Why would you want to drop your health insurance?
Often, people don’t want to drop health insurance. But cost (or other circumstances) force this decision. You may want to drop your insurance because:
Premiums are unaffordable.
The deductible is too high for your budget.
You lose ACA subsidies, or your premiums remain unaffordable despite the discounts.
The coverage doesn’t meet your needs.
The prescription coverage doesn’t include the medications you take.
You have access to another health plan that meets your needs or costs less.
You move out of the coverage area.
Is there a penalty for canceling health insurance?
The ACA law originally penalized people who didn’t have health insurance. That mandate no longer exists. But your state or territory can have its own requirement (which may carry a financial penalty):
California: Residents without coverage face a penalty, but the amount varies annually. For 2025, the penalty was at least $950 per adult and $475 per dependent in a household. The state’s Individual Shared Responsibility Penalty Estimator can help you determine the amount you owe.
Massachusetts: The individual mandate doesn’t apply to children under age 18. It also doesn’t apply to people with a qualified hardship or an exemption, or those whose incomes are at or below 150% of the federal poverty level (FPL). The penalty is assessed on a sliding scale. For 2026, individuals without insurance must pay a $312 penalty if they earn 150.1% to 200% of the FPL and $612 if they earn 200.1% to 250% of the FPL.
New Jersey: The requirement is based on how many months people in the household didn’t have minimum essential coverage or an exemption. For 2025, the amount ranges from $695 to $4,908 for an individual taxpayer. It increases with higher household income and more uninsured people in the household.
Rhode Island: The penalty is whichever amount is greater: 2.5% of annual household income or $695 per adult and $347.50 per dependent under 18.
Washington, D.C.: The fine for anyone without coverage for all of 2026 is the greater amount: 2.5% of annual household income or $845 per adult and $422.50 per dependent under 18, with a cap of $2,535 per family.
Vermont: Residents must report on their tax return whether they had health insurance. But there’s no financial penalty.
Maryland: Residents are asked about insurance status when they file their state tax return. Those who aren’t enrolled can opt to get information about plans they may qualify for, and there’s no financial penalty for lacking coverage.
What are your options for healthcare without insurance?
In the U.S., most people have health insurance. Employer-sponsored plans, Medicaid, and Medicare provide most coverage. In 2025, more than 24 million people signed up for an ACA marketplace plan. Since the 2021 coverage year, enhanced premium subsidies made plans affordable for most enrollees, leading to this record enrollment. The enhanced subsidies ended in 2025, and ACA enrollment plunged for the 2026 coverage year. (Standard premium tax credits are still available for those who qualify.)
Healthcare options that don’t involve insurance
If you can’t afford health insurance — or you drop coverage — here are some self-pay healthcare options:
Direct primary care: Direct primary care (DPC) is an alternative model for accessing medical services without insurance. You make the arrangements with a healthcare professional to pay out of pocket. DPC may be offered by a physician, a physician associate (a new title for a physician assistant, or PA), or an advanced practice registered nurse such as a nurse practitioner. Your DPC arrangement typically covers routine care, management of chronic conditions, acute care visits, and care coordination. Emergency and hospital services aren’t included.
Cash-pay care with a good faith estimate: If you’re not using insurance to pay for your care, you]re entitled to a good faith estimate (GFE) — an itemized list of expected costs for a scheduled service. If your bill is at least $400 higher than the GFE, you can dispute the charges.
Concierge care: Concierge care is a membership-based model, often with an annual retainer fee that gives you direct access to a physician. Same-day appointments are usually available. Concierge care offices usually limit the number of patients in the practice and offer longer appointments than what is typical. Concierge care often attracts higher-income consumers. It’s also called concierge medicine, retainer-based medicine, a platinum practice, or boutique medicine.
Medical cost sharing: Sometimes called healthcare-sharing plans, medical cost-sharing programs are models in which group members pool their money to cover everyone’s medical costs. Medical cost-sharing programs aren’t insurance, and member costs may not be paid. There are financial risks, and members can end up with unpaid bills leading to hefty medical debt.
Saving your premiums to pay for care: Many people have been paying hundreds of dollars monthly for health insurance premiums. Instead, you could save that money in an account and use the funds to pay directly for healthcare. Healthcare facilities and hospital systems report that more people are cash-pay customers. Many patient forms and tools for finding healthcare professionals now offer guidance for self-pay and uninsured consumers.
Tax-advantaged healthcare accounts: Your employer may offer a health reimbursement arrangement (HRA) instead of health insurance. (You can also have an HRA with health insurance or use the funds to pay premiums for a plan you buy on your own.) Only your employer contributes to an HRA. You can use this money to pay for qualified healthcare expenses tax-free. If your employer offers a flexible spending account (FSA), you can use it without a health plan.
Cash care: Some healthcare facilities, including convenience care options, have transparent or flat-fee pricing. These locations include retail clinics — often in pharmacies or grocery stores — and urgent care centers.
Sliding-scale care: Care at community clinics is typically low cost, but it’s not free. Other low-cost healthcare options are also available, including some that are free.
Patient assistance programs: If you don’t have insurance, you may qualify for free healthcare and prescription medications from patient assistance programs.
Charity care: You may qualify for charity care, also known as indigent care — if you’re medically indigent. This means medical bills make up a significant share of your income and medical debt threatens your financial stability. You’re financially indigent when you’re uninsured or underinsured and your household income falls below a threshold. Certain nonprofit hospitals are required to offer this type of financial assistance, and some for-profit hospitals do too.
GoodRx: You can also save on cash-pay prescriptions by using a free GoodRx coupon. Visit goodrx.com, or download the GoodRx app on your mobile device to compare prices.
GoodRx Companion. GoodRx Companion, a subscription service with a low monthly price, can help you pay less for self-pay healthcare. You could save on prescriptions, telehealth, and other everyday healthcare services, including dental, vision, lab work, and imaging. With this program, you can access more than 250 generic medications at no extra cost. Hundreds more cost less than $10 per fill.
Pros and cons of self-pay healthcare
There are advantages and disadvantages of self-pay healthcare. Covering medical services yourself can be less costly, but not always. If you have even moderate health concerns, it’s usually more costly. Before going this route, you may want to think about how you’ll access healthcare without insurance. These considerations include:
Finding cash-pay facilities near you
Having a strategy for comparing costs
Potentially being exposed to massive medical debt
Here’s a snapshot of the possible benefits of skipping insurance and why dropping coverage might not be a good idea for you:
Pros and cons of self-pay healthcare
Advantages of self-pay healthcare | Disadvantages of self-pay healthcare |
|---|---|
You may be able to save money on medical costs. | Without negotiated insurance prices for care, you’ll likely have higher costs. You’ll have to pay for preventive care, which is included in most insurance plans. |
You won’t have to pay health insurance premiums. That money can be spent on healthcare. | You could have very high costs if you need services such as hospital admission or cancer care. You also won’t have an out-of-pocket maximum. |
If your healthcare costs less than premiums would, you’ll save money. | If you need high-cost care, you could create credit card debt or end up with unpaid medical bills. |
You’ll pay more attention to up-front costs and learn skills to manage your medical expenses. This can help you increase your healthcare cost literacy. | You could accrue hefty medical debt, which would hurt your credit score. |
Who might be able to risk going uninsured?
Lacking health insurance has risks, including medical debt and medical bankruptcy. But being without insurance is also common. In 2026, about 11% of U.S. adults ages 19 to 64 were uninsured.
Cash-pay care is not ideal for most people. Those who may face the least risk with self-pay healthcare include:
Healthy people who don’t have chronic conditions
Young people
People who aren’t prone to accidents
People with higher incomes
People who plan to sign up for insurance the following year (or sooner)
Frequently asked questions
Possibly. If you paid premiums in advance, you may be able to get a refund if you cancel. If you cancel new coverage within a certain number of days, you may qualify for a refund. For some plans, you can cancel midmonth and get a prorated refund for half of the monthly premium. The cancellation in this case must typically happen before the 16th. Note that not all plans can be canceled at will, including employer-sponsored plans.
Most plans can be canceled anytime, but your coverage may not end on the day you cancel. Your coverage may last until the end of the month you cancel, the end of the following month, or the end of the coverage year.
Possibly. If you paid premiums in advance, you may be able to get a refund if you cancel. If you cancel new coverage within a certain number of days, you may qualify for a refund. For some plans, you can cancel midmonth and get a prorated refund for half of the monthly premium. The cancellation in this case must typically happen before the 16th. Note that not all plans can be canceled at will, including employer-sponsored plans.
Most plans can be canceled anytime, but your coverage may not end on the day you cancel. Your coverage may last until the end of the month you cancel, the end of the following month, or the end of the coverage year.
The bottom line
Health insurance is not the only way to cover healthcare costs. People who access healthcare without insurance are known as cash-pay customers. This can be a risky option for people with chronic conditions or very costly care. But there are ways to handle the costs of healthcare without insurance while sidestepping hefty medical debt.
Options used alone or in combination include: direct primary care, cash clinics, tax-advantaged healthcare accounts, sliding-scale care, patient assistance programs, and hospital charity care. You can save on cash-pay prescriptions by using a free GoodRx coupon. A GoodRx Companion subscription offers discounts on a wide range of care.
Why trust our experts?
References
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