2013
The centerpiece of Obamacare is the health insurance exchanges coming in 2014. The goal is to provide coverage to more Americans and to make that coverage accessible and “affordable” the affordable part through lower income people receiving a tax credit toward the insurance premiums and in some cases toward out of pocket costs.
You would think that’s a pretty good deal, but just to be sure the Affordable Care Act includes an incentive to buy coverage; play or pay if you will. For 2014 the penalty is $95 per adult and $47.50 per child (up to $285 for a family) or 1.0% of family income, whichever is greater.
Lets take a family of four earning $50,000 a year. Under the exchange the family premium for medium level coverage is estimated at $11,104; the subsidy tax credit is $7,718 leaving a family premium of $3,385 (less than 30% of the premium). However, the penalty for not taking coverage in this case is $500 a year.
A new HealthPocket survey of 1,003 consumers shows that close to 67 percent of respondents say the penalty for not carrying health insurance — amounting to the greater of 1 percent of household income or $95 per individual — is not enough of a motivator for them to shop for coverage.
As irresponsible as it may be to go without health insurance, for some people it’s all about the money and the math in this case says $3,385 is considerably more than $500.
If the Affordable Care Act does not expand coverage to the extent predicted while at the same time increases premiums through the array of benefit mandates, fees and taxes, we are going to be fighting this fight for a very long time.
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