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I am sure that you have heard the right wing talking point about how people should pay the $95 penalty rather than purchase insurance through "Obamacare."  For example, here is an exchange between Chris Wallace and Cade Joiner (who identified himself as a small business owner) on Fox News Sunday on November 10, 2013:  

JOINER: And I have looked a little at the page. But I'm sort of caught between a rock and a hard place because it's little more money than I can afford to pay every month and I don't have the subsidy. So, I've got to make a tough decision. And that decision may end up being potentially paying the fine and not taking coverage at all. I'm a 34-year-old, very healthy, never had any health care problems. So, I may just gamble.

WALLACE: So, you are saying you may just ignore the individual mandate, pay the penalty, which is $95 in the first year, and a guy who had health insurance is going to go without?

JOINER: Yes, that's a very good possibility, Chris.

This statement about the penalty being $95 is simply not correct.  According to The Tax Policy Center of the Urban Institute and the Brookings Institution:
For 2014, the tax is the greater of a) 1.0 percent of income (net of specified deductions) or b) $95 per adult plus $47.50 per child, up to a maximum of $285 per family. However, the penalty is capped at the average cost of a bronze level health plan.

The percentage tax increases to 2 percent in 2015 and 2.5 percent in 2016 and later years. The dollar penalty rises to $325 per adult plus $162.50 per child (with a family maximum of $975) in 2015; increases to $695 per adult plus $347.50 per child (with a family maximum of $2,085) in 2016; and is indexed for inflation in subsequent years.

In each year, the penalty is capped at the national average premium for bronze level insurance plans. That average premium is projected to be:

              2014:        $3,600 per adult       plus      $1,900 per child
              2015:        $3,816 per adult       plus      $2,014 per child
              2016:        $4,045 per adult       plus      $2,135 per child

In addition, NPR notes that

it's important to remember that the flat-fee penalty will be assessed for every family member who lacks health coverage.. . .

This year's top penalty could be about . . . $11,000 for a family of four."

Based on this, I think that anyone listening to the right wing talking point that there is only a $95 penalty for failing to purchase insurance under the ACA is in for a rude awakening.  These people could wind up paying the same amount of money out of pocket as a penalty as they would pay for bronze coverage without getting the benefit of health insurance.

Anyone not having insurance has until March 31, 2014 to sign up for coverage.  This date marks the end of the open enrollment period.  After that, only people with a change in condition such as a loss of a job or a divorce can sign up before the next open enrollment.

This means that anyone who does not discover that the right wing talking point is wrong until after March 31st will not be able to obtain coverage through the ACA this year.  

I only hope that too many people don't delay doing their taxes until the last minute when it will be too late to sign up for coverage.  

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Comment Preferences

  •  i have heard that the only way to collect (0+ / 0-)

    the penalty (Tax) is to garnish your tax refund. So if you can avoid overpaying your taxes, they cannot collect the penalty (tax) anyway.

  •  There are also many situations where one may be (4+ / 0-)
    Recommended by:
    MaikeH, Chi, celdd, VPofKarma

    exempt from the individual mandate penalty.  From

    Exemptions from the payment
    Under certain circumstances, you won’t have to make the individual responsibility payment. This is called an “exemption.”

    You may qualify for an exemption if:

    You’re uninsured for less than 3 months of the year

    The lowest-priced coverage available to you would cost more than 8% of your household income

    You don’t have to file a tax return because your income is too low (Learn about the filing limit.)

    You’re a member of a federally recognized tribe or eligible for services through an Indian Health Services provider

    You’re a member of a recognized health care sharing ministry

    You’re a member of a recognized religious sect with religious objections to insurance, including Social Security and Medicare

    You’re incarcerated, and not awaiting the disposition of charges against you

    You’re not lawfully present in the U.S.

    Hardship exemptions

    If you have any of the circumstances below that affect your ability to purchase health insurance coverage, you may qualify for a “hardship” exemption:

    You were homeless.

    You were evicted in the past 6 months or were facing eviction or foreclosure.

    You received a shut-off notice from a utility company.

    You recently experienced domestic violence.

    You recently experienced the death of a close family member.

    You experienced a fire, flood, or other natural or human-caused disaster that caused substantial damage to your property.

    You filed for bankruptcy in the last 6 months.

    You had medical expenses you couldn’t pay in the last 24 months.

    You experienced unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member.

    You expect to claim a child as a tax dependent who’s been denied coverage in Medicaid and CHIP, and another person is required by court order to give medical support to the child.

    In this case, you do not have the pay the penalty for the child.

    As a result of an eligibility appeals decision, you’re eligible for enrollment in a qualified health plan (QHP) through the Marketplace, lower costs on your monthly premiums, or cost-sharing reductions for a time period when you weren’t enrolled in a QHP through the Marketplace.

    You were determined ineligible for Medicaid because your state didn’t expand eligibility for Medicaid under the Affordable Care Act.

    Your individual insurance plan was cancelled and you believe other Marketplace plans are unaffordable.

    The most important way to protect the environment is not to have more than one child.

    by nextstep on Wed Mar 12, 2014 at 09:12:35 PM PDT

    •  One more exemptions to add: (0+ / 0-)

      Ex-pats who qualify for the Foreign Earned Income Exemption, meaning either living overseas on a resident visa or being away from the USA at least 330 days a year.

      I meet this one.

      I voted with my feet. Good Bye and Good Luck America!!

      by shann on Thu Mar 13, 2014 at 06:39:13 AM PDT

      [ Parent ]

  •  There is no individual mandate (0+ / 0-)

    For the next two years. So no one will pay a tax.
    As per the wsj

    •  Wrong (0+ / 0-)

      That exemption only applies to people who already have a non ACA compliant policy.

      So cynical - you must buy insurance, unless you have junk insurance already.

      Since it is illegal to declare more exemptions toward your withholding than you will declare on your return most taxpayers get refunds. It will be essentially impossible to avoid the penalty.

      Mr. Cynical sez: almost 40 million Americans are in for a big surprise in April of 2015. Also, the reinsurance program (the "bailout") runs out at about that time, so it's likely that there will be a larger than expected premium increase - right in time for the 2016 elections.
      Maybe President Obama is trying to force HRC to finally include a public option - with a doctor mandate to match the individual mandate.
      We can but hope.

  •  Then again (1+ / 0-)
    Recommended by:

    That scenario might also force states to go single payer.
    Even Alabama will go blue in 2018 if that happens.
    We can but hope.

  •  It's late, but in case you're still listening (0+ / 0-)

    take it from a Californian - it won't work. You will create an incentive - in fact an imperative - to increase development and encourage flipping - not the other way around. In addition it will empower the "we can't afford it" crowd.

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