Posted on 10/04/2013 2:57:21 PM PDT by Maelstorm
It may seem like a clever idea to save yourself cash by not purchasing health insurance, but with Obamacare kicking in, you’ll have penalties to pay, which could cost you big bucks in the long run.
Not only are you playing financial Russian roulette – you could be forking out tens of thousands or hundreds of thousands of dollars if you’re injured in an accident or become seriously ill – you’ll also have to pay a penalty to the federal government for flouting the law, costing you hundreds or thousands of dollars more.
A wiser decision if you’re uninsured is to start shopping on your state health exchange, which opened Tuesday — with glitches – as a key part of health care reform.
Money Talks News founder Stacy Johnson has information in the video below about the penalties you’ll face if you ignore the law. Check it out, then continue reading for more details about health reform.
It’s OK if you feel at a loss about the Affordable Care Act, which is also known as Obamacare. You’re not alone. A newly released survey by the Commonwealth Fund found that only 4 in 10 adults were aware of the health exchanges and the financial subsidies available to help cover costs when you buy insurance there, and only one-third of those without insurance were aware of the new way to shop for health insurance.
In the first quarter of the year, 46 million Americans didn’t have health insurance, according to the U.S. Centers for Disease Control and Prevention. The establishment of the state health exchanges, or insurance marketplaces, is designed to reduce the number of uninsured.
Who needs insurance?
Starting next year, almost everyone will need to be insured. You can purchase that insurance on your own or through the exchange, have it through your employer, or have it provided by government programs such as Medicare, Medicaid, the Children’s Health Insurance Program, TRICARE and veterans health insurance programs.
There are some limited exceptions, such as for those who earn a very low income or are members of certain religious groups, as shown in this graphic by the Kaiser Family Foundation.
While you can start shopping for insurance on a state exchange now, the policies don’t take effect until Jan. 1.
What if I don’t buy insurance?
If you skip the insurance, you’ll pay a penalty. For 2014 the fine is $95 for an individual or 1 percent of your income, whichever is greater, along with $47.50 per uninsured child, maxing out at $285 for the year.
But by 2016, an individual would pay $695 or 2.5 percent of your income.
The TurboTax website has a calculator to help you determine how high a penalty you’d pay.
Without insurance, you’d also face a double whammy. By 2016 you’d be forking over almost $700 to the federal government and having nothing to show for it, and still have to pay your own medical bills if you’re injured or become ill.
What will insurance cost?
The exchanges will sell four levels of policies – platinum, gold, silver and bronze. Bronze plans will have the lowest premiums, but cover only 60 percent of costs. Platinum, on the other hand, will have the highest premiums, but cover 90 percent of costs.
If you earn up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four this year) you’ll be eligible for a subsidy, which will come in the form of a tax credit. Subsidies are based on your family size and your earnings. The less you earn, the higher the subsidy.
With the subsidies, more than half of Americans should be able to find health insurance for less than $100 a month, according to the U.S. Department of Health and Human Services, although you might choose to pay more.
There also will be caps on out-of-pocket costs. Typically, the maximum an individual will pay in co-payments and deductibles next year is $6,350, and a family’s costs will be capped at $12,700.
What if you delay?
Because you can’t be turned down for health insurance under the Affordable Care Act if you have a pre-existing condition, you might be tempted to dawdle and see if you actually get sick before purchasing insurance.
But that strategy could easily backfire.
You’ll only be able to buy insurance on your state health exchange through March 31, 2014. After that, the open enrollment period will run from Oct. 15 to Dec. 7 each year.
There are exceptions that allow you to purchase insurance on the exchange at any time of the year if you experience a life-changing event, such as moving to a new state, getting married, getting divorced, or having a baby.
While you can purchase insurance outside the exchange at any time, you won’t be eligible for a government subsidy, which is one of the cornerstones of health reform.
Bottom line: Ponying up for health insurance now can potentially save you from astronomical costs down the road.
The IRS cannot prosecute people who do not pay the fine.
Agitprop.
wait until you get sick- then buy it!!
Wow I learn something new everyday. Silly me though the penalty was $95 a year, now it's "hundreds of thousands of dollars". What else is the twice unconstitutionally elected Kenyan foreign agent going to surprise me with next? That all people who do not buy Shariacare will be summarily executed by the will of Allah?
100%
The income tax was a way for the Democrats to take a bite of the working man’s WAGES. Obamacare is a way for the Democrats to take a bite of the working man’s/woman’s BENEFITS. Wake up young people. The Democrats want your stuff.
According to a recent study by New York University economics professor Edward N. Wolff, median net worth is at the decades-low figure of $57,000 (in 2010 dollars).
https://appam.confex.com/appam/2012/webprogram/Paper2134.html
If you get an illness, you buy insurance,
if you get into some accident, you get healthy, then declare bankruptcy. The FHA has a program where a bankrupt person can be eligible for FHA backed mortgages in as little as 12 months after BK filing.
That is the future of the USA>
Nobody is going to buy this crap, there is just no way. Oh sure there will be some, but no way at the level they are expecting for the simple fact people don’t like being told what to do. This is a huge difference between buying car insurance and buying something just for existing. This abomination is going to collapse faster than Michael Jacksons legs at a Cub scout jamboree.
I will NOT SUBMIT!
Like most "pop" financial advice.
I like this "shut up, and do as you're told" line:
A wiser decision if you’re uninsured is to start shopping on your state health exchange...
They can drive a tank through my house.
I’m not doing this or anything else they say.
They can go to Hell.
Don’t they understand some people will not be able to afford the insurance only the penalty. According to the Calif exchange my premiums would be $1154.00 a month I don’t have it so I would have to pay the fine. Just because your adjusted gross income says you make so much that does not take into account taxes being with held, all of your household expenses at the end I just don’t have it. They should figure out what your salary is after tax if they did that I would be able to get subsidiaries. This whole thins is a bunch of crap.
The insurance companies will be so screwed. How could they not see this?
Well that stipulation could be on page 666 for all we know. Just ask Waxman he never read it before he voted yes on the effing bill.
I can make sure one of those things happens in a pinch.
This isn't stated in most places, but for completeness:
The fine is capped at the cost of a "Bronze" plan in the person's state. So, for a single person, I think the average is about $2,000/year.
Funny article. We will not comply.
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