Can I drop my health insurance and then buy a new policy later?

Health insurance is intended to be there for you when a medical problem comes up, saving you a great deal of money over the cost of paying for medical care out of pocket. In order for health insurance to work properly and fairly, you have to carry it continuously, including times when you do not need medical attention.

Even if you pay for health insurance for years, it only takes one serious illness or surgery to completely wipe out everything you have paid into the plan. Without insurance, such costs could easily lead to financial ruin. To avoid people waiting until they get sick to sign up for health insurance, most insurance companies have a waiting period of between 30 and 90 days when the policy will not pay any claims.

If you or a member of your immediate family has a preexisting condition, it is more imperative than ever to have health insurance continuously. As the ACA goes into effect next year, health insurers will have to accept preexisting conditions, but that part of the law has not gone into effect yet, and dropping your coverage could lead to needing medical care that you cannot afford.

Even if you are switching employers and will have a new health plan when the enrollment period begins, it might be a good idea to keep your old coverage under the COBRA provisions. This extends your existing health coverage while you wait for or shop for other coverage, but you will have to pay administrative fees to initiate it and full premiums including the portion previously paid by your employer.

Most health insurance companies will not penalize you for taking a break in your coverage, but you are assuming full risk for illness and injury when you do so. A single accident which leads to ongoing treatment and therapy which happens while you are without coverage is your sole responsibility, and may not be accepted by the new health plan for a period of time after you get the coverage.