How to Avoid the Tax Mandate on Obamacare
NEW YORK ( MainStreet) I am "Passive & Unengaged" when it comes to healthcare, according to the U.S. Centers for Medicare and Medicaid Services, in a "psychographic segment" break-down of the uninsured American population. We are the 20.4% who are a passive and skeptical healthcare audience with better health care status. We do not use prevention and are not particularly worried about health.
To be successful and maintain costs, the Affordable Care Act (ACA) needs large healthy population segments like us plus the "Healthy & Young" (19.6%), "Informed, Healthy & Educated" (17.2%) and the Mature & Secure (11.7%) to buy in. We'd pay premiums and not really use the healthcare services to float the immediate tide of sick people with pre-existing conditions who will flood the health insurance exchanges and doctors offices nationwide in 2014 (that's the 23% "Sick, Active & Worried" and the 7.9% "Vulnerable & Unengaged" segments of the currently uninsured population.)
So will the ACA get me to enroll is there enough incentive?
Some might say, "Hey, what about the Federal Mandate?" This part of the ACA law says I must enroll or pay a penalty in the form of an additional tax at tax time. According to the official ACA website , the 2014 penalty is the higher of 1% of your yearly income or $95 per person for the year (uninsured children are $47.50 per child). The family maximum penalty fee in 2014 is $285. The penalty will be applied as an additional tax or it will reduce any tax refund you are owed.
And, the Federal Mandate penalty will increase every year. In 2016, it will be the greater of 2.5% of income or $695 per person. That's pretty crafty, because that penalty might come close to the subsidized price of a bronze or silver plan premium depending on income and the size of the family (which is anyone with incomes as high as $45,960 for an individual and $94,200 for a family of four.)
Currently, health insurance is not about health and prevention."People buy health insurance to protect themselves from financial disaster, same as homeowners insurance, life insurance and car insurance," says Lara Cartwright-Smith, assistant research professor in the George Washington University School of Public Health and Health Services. "The uninsured have the sense that if they go to the hospital they will be taken care of...and they will, but then they will receive a bill that can financially ruin a family including the loss of their home and even bankruptcy."
I've skated by without paying healthcare insurance for myself for my husband all the 20 years we've been self-employed, but we've paid the price in fear of getting hurt or sick.
So, by 2016: pay the premium and get healthcare or pay an equal penalty and get nothing.