There are a number of reasons why you might decide to cancel your health insurance plan. Maybe you started a new job and are now eligible for the company’s better coverage. Perhaps you recently turned 65 and now qualify for comprehensive Medicare. Or unfortunately, maybe you got laid off and can no longer afford healthcare coverage on your own due to the high cost of premiums, deductibles or co-sharing — or all three.
Your best steps to cancel health insurance will depend on various factors, including your provider’s particular protocols, your reasons for dropping coverage, and whether your plan covers your dependents.
Here are key guidelines to help you cancel unwanted, inappropriate or unaffordable health insurance, as well as tips to help you make smart decisions while changing your healthcare coverage.
How to Cancel Obamacare Marketplace Health Insurance
- Online: If you’re dropping an Affordable Care Act (ACA) Obamacare plan that you purchased on a government marketplace, such as Healthcare.gov or your state marketplace, simply log into your Marketplace account. The exact prompts and page flows will vary among state marketplaces. If you bought your plan on the federal exchange simply log into your account on healthcare.gov, navigate to the “My Plans & Programs” tab, then select the menu option to “End (Terminate) All Coverage.” As a Marketplace health insurance policyholder, enter the date when you would like your coverage to end before following the final instructions to cancel the policy.
- By Phone: If you prefer to cancel your Marketplace plan over the phone, call the government ACA help center at 1-800-318-2596, connect with a representative and confirm your identity. The Marketplace representative should be able to help you cancel your plan in one call. Canceling coverage by phone may be the best option for people who are not comfortable with a computer, or for those who would like assistance canceling your plan and switching to a government-run healthcare program such as Medicaid and the Children’s Health Insurance Program (CHIP). These programs offer free or low-cost coverage to millions of low-income Americans.
More Helpful Tips about Cancelling Marketplace Plans
- Cancel ASAP: Once you’ve decided to cancel your Marketplace plan, do so ASAP. There is typically a 14-day delay before coverage ends, meaning you will be responsible for premium payments during that two-week wait. There is an exception, however, if you’re canceling coverage for your spouse and other dependents. In those cases, the cancellation typically is immediate.
- Set an End Date Ahead of Time: Policyholders are permitted to schedule the cancellation of Marketplace insurance, meaning you can set the exact future day you want your coverage to end.
- If Possible Cancel during Open Enrollment: You can cancel your health insurance plan at any time, but if you cancel outside of the year-end open enrollment period, chances are you won’t be able to enroll in a new healthcare plan until the next open enrollment period rolls around in the fall. Open enrollment periods (OEP) provide a narrow six-week window, typically from November 1 to Janaury 15, allowing you to sign up for health insurance that usually begins January 1 of the following year. However, if you have a life-changing event, such as getting laid off from a job that provided health insurance, or moving to a new zip code, marrying or divorcing, and more, you are entitled to an immediate Special Enrollment Period (SEP). Enrollees must, of course, thoroughly document any life change to qualify. For a full list of life-changing situations go www.healthcare.gov.
- Make Sure You Stop Getting Billed Once You Cancel: Check your bank statements. Make sure you’re not being billed for your canceled policy and that your new coverage is active.
How to Cancel Health Insurance Purchased from a Private Insurer
Contact Your Provider: If you want to cancel health insurance you bought from a private insurer, you’ll need to contact that insurer for directions. Different carriers have different cancellation protocols. Some insurers may send you a form to fill out; others may want a more formal written confirmation to end coverage. Call the customer service number listed on the back of your health insurance card to get the details you need to follow.
Helpful Tips When Cancelling Private Plans
- Get Carded: You’ll commonly find the insurer’s customer care phone number for your policy, printed on your health insurance card and on your monthly premium bill.
- Watch Out for Waiting Periods: If you’re covered through a new employer, remember that many workplaces require a 30- or 90-day (or more) waiting period before your coverage starts. To avoid an unexpected lapse in coverage, double check with your HR department to confirm exactly when your coverage begins.
- Write Down Confirmation Numbers: When you speak with an insurance representative, record the date in your notes, plus the representative’s full name, the callback number, and your cancellation confirmation number. With that information at hand, it will be much easier to resolve any future issues that may arise.
How to Cancel Employer Health Insurance
- Contact HR: If you want to cancel your health insurance at work, speak to the colleague who handles employee benefits.
- Scheduling Matters: Make sure that the cancellation date for your existing coverage is on or after the date when your new coverage begins.
- Exceptions for “Cafeteria Plans:” Employees can decide to cancel their employer-sponsored health insurance at any time, provided the worker is not deducting his or her premium payments from salaries pre-tax. When employees can make their premium payments with pre-tax dollars, they are enrolled in what’s called a Section 125 Plan, and therefore by law they can only alter or cancel their plan in an OEP or SEP.
Helpful Tips about Employer Health Insurance
- COBRA: Employees (and their dependents) who lose group coverage at work must be offered the opportunity to continue their medical coverage — but at their own expense.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees and their families who lose their health benefits to continue participating in their group health plan for limited periods — 18 months for the worker, up to three years for dependents. You qualify for COBRA in cases of voluntary or involuntary job loss, reduction in work hours, divorce, and death. But COBRA is expensive because employers stop contributing; the entire health costs fall on you, plus a 2% administrative fee.
- If You Have Questions or Concerns: If you want to learn more about canceling your health insurance plan, talk to the HR department at your workplace.
How to Cancel Medicaid or CHIP Programs
- Income Adjustment: Expect the state to notify you If your household income increases or state qualification standards change, and you, therefore, are no longer eligible for Medicaid or the Children’s Health Insurance Program. (CHIP provides low-cost health insurance to children up to age 19 in families that don’t qualify for Medicaid.) If you lose your Medicaid or CHIP coverage, you will have a 60-day special enrollment window to buy a Marketplace plan, assuming you can afford to do that after receiving common government subsidies. Nearly 90% of those with Obamacare get subsidies.
- Notify Your Caseworker: If you must cancel your Medicaid or CHIP plan because you get a new job or your child turns 19 and ages out, you will have to research the process in your state. State rules vary significantly. Start by calling your state Medicaid department caseworker. Typically, you will have up to 30 days to enroll in a Marketplace plan before losing your Medicaid or CHIP coverage.
How to Cancel Obamacare and Switch to Medicaid or CHIP
- Expect a Letter: If you decide to cancel your Obamacare plan because you’ve become eligible for virtually free Medicaid or CHIP, you will again have to follow a specific process. You can expect to receive a notification letter telling you that you are eligible for Medicaid or CHIP, along with a list of actions you need to take to enroll — all by a certain date. Don’t delay. Enroll ASAP.
- Don’t Forget: Also, you must remember to cancel your Obamacare plan on time. If you fail to cancel your Obamacare plan once your Medicaid coverage starts, your Marketplace coverage and its bills will continue. But any government subsidies you were getting will end, sticking you with the full cost of that health insurance, minus any cost-sharing reductions you may have been receiving. Cost Sharing Reduction Subsidies (CSR) reduce out-of-pocket costs on ACA Marketplace Silver plans for people earning from 100% to 250% of the federal poverty level in household income (100% is $12,760 for an individual, $17,240 for a family of two, $21,720 three). These subsidies are in addition to Premium Tax Credits, which lower premium costs for those making between 100% to 400% of the poverty level, up to around $50,000 for an individual, $89,000 for a household of three.
- Helpful Tips for Switching from Obamacare to Medicaid: Read this document with detailed instructions about how to cancel your Marketplace coverage in order to switch over to Medicaid or CHIP. It outlines the cancellation process for policyholders in a range of situations.
How to Switch from Obamacare to Medicare
- Happy 65th Birthday: If you have a Marketplace plan, you can keep it until you decide to get Medicare. Most people enroll as soon as they are eligible through the Initial Enrollment Period, which begins three months before their 65th birthday and ends three months after their 65th birthday.
- If you like, you can keep your Marketplace plan, too. But once your Medicare Part A coverage starts, you’ll no longer be eligible for premium tax credits or other cost savings you may be getting. So you’d have to pay full price for the Marketplace plan.
- There is another option after turning 65. You could continue getting your health insurance at work until you retire or lose your job.
How to Cancel Health Insurance on Behalf of a Deceased Person
- To Cancel Medicare: To report the death of a person receiving Medicare benefits, make sure you have the person’s Social Security Number (SSN). Then call Social Security at 1-800-772-1213 (TTY: 1-800-325-0778) to report the death.
- To Cancel a Marketplace Health Insurance Plan: If you’re the main policyholder and someone on your plan dies, you can cancel health insurance for the deceased enrollee online at healthcare.gov. You can also contact the Marketplace Call Center at 1-800-318-2596 (TTY: 1-855-889-4325) to report the date of the person’s death.
- To Cancel a Marketplace Health Insurance Plan (if you aren’t included on the deceased person’s policy): You can report a death on behalf of a household, even If you are not a member of the household listed on the Marketplace application, so long as you’re at least 18 years old. Here’s what you’ll need to do:
- Submit copies of documents verifying the death: Such as the death certificate, obituary, court document providing proof of death, or proof that you’ve been named executor of the estate.
- These documents should include: the deceased person’s full name, date of birth, SSN (if known), and your contact information as the person submitting the documentation.
- Mail copies of all documents to: Health Insurance Marketplace / ATTN: Coverage Removal, Dept. of Health and Human Services, 465 Industrial Blvd., London, KY 40750-0001. Note that you should keep the originals as backup and only send copies.
- Marketplace Call Center Will Contact You: The Marketplace Call Center will try to contact you about ending coverage for the deceased, and will inquire about the status of anyone else still on the plan. For example, the remaining household members may need to update their tax filings, financial, or other information on their application. A death in a household usually qualifies the other members for a SEP, allowing them to change plans.
Exceptional Cases for Cancelling Health Insurance
- Child Support or Divorce: You might be legally obligated to maintain your health insurance policy as part of court-ordered child support or divorce proceedings. Also, if a Medicare recipient decides to get private insurance or HMO coverage, that person must apply to the Health Care Financing Administration (HCFA) before changing insurers or plans.
- When You Cancel Medicare and Want to Switch to Private Coverage: When someone covered by Medicare decides to switch to better private insurance, say, through coverage offered by a new job, that person must apply to the Healthcare Financing Administration (HCFA) before changing insurers or plans.
Taking the Next Steps
If you’re unhappy with your current coverage or you somehow lose coverage, do not panic; almost always, there are a number of viable options available for you.