Not Planning to Buy Health Insurance? Here’s What’s Going to Happen to You

[mystery-ak]

http://www.moneytalksnews.com/2013/10/04/skipping-health-insurance-could-cost-you-big-bucks/

October 4, 2013

By Susan Ladika

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.


http://www.youtube.com/watch?v=fz0ysOSn6qk

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.

[jmyrlefuller]

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

Yet the system only works if people DON'T get ill. Take me, for instance. Even for my age I am markedly healthier than many of my peers. I rarely get sick, am immune to the flu (which admittedly involves some genetic luck), and am physically sound to the point I almost never get injured. I am exactly the type of person who would lose out big if I bought insurance, because I so seldom use the health care system that I would pay far more for insurance than I would paying my costs directly out of pocket. To play on fear, and to assume that eventually I will get sick or need it, is the work of Ponzi schemers-- buy now, and eventually you will get the benefits from everyone else later.

Now, as for those subsidies. There's just one little problem with that. You see, if the exchanges are only open from October to December, and the subsidy comes in the form of a tax credit, that tax credit won't be refunded to you until April, meaning it will come about as far away from the actual purchase of the item as you could possibly imagine, and very few people with working-class incomes are going to hold onto that money long enough. In other words, you won't actually get any discount on the price of insurance, just a check six months from now that might cover some of it.

I'd rather continue fighting.