Will hiking average Obamacare tax penalty to $969 boost enrollment?
By Emma Court
Published: Dec 9, 2015 6:05 p.m. ET
Average tax penalty for uninsured households is jumping 50% to nearly $1,000
Being uninsured in America could cost as much as a MacBook, high-end bicycle or a half-carat engagement ring after an Obamacare tax penalty increases about 50% next year to nearly $1,000.
Households that don’t have health insurance in 2016 will pay on average penalty of $969, according to an analysis released Wednesday by the Kaiser Family Foundation.
Penalties have been deliberately increased over a phase-in period that began in 2014, and this is to be the largest and final jump. The penalty won’t actually be paid until people file their taxes in 2017.
But even the 47% increase from this year’s average $661 tax penalty (payable when taxes are filed in 2016) won’t make health insurance look cheap to most uninsured Americans. In 2016, the penalty will be more than the lowest level of health-care coverage for the 3.5 million uninsured people who qualify for premium subsidies.
But it will still be cheaper to pay the penalty than to buy insurance for the bulk of the uninsured, or 7.1 million people, according to the Kaiser report, which used data from the 2015 Current Population Survey and 2016 marketplaces set up under the Affordable Care Act.
Of course, the size of that gap could shrink or even disappear depending on how much an uninsured person then spends on medical care in the year.
The penalties are the most controversial part of the ACA, part of a push by the Obama administration to encourage millions of uninsured Americans to get health insurance. The belief is that the higher penalty will get people to buy health insurance, said Larry Levitt, a co-author of the Kaiser research, particularly the 3.5 million for whom “it’s a financial no-brainer.”
But “it’s really the big wild card,” he said, since the penalties can only be effective if people know about them. Many people outsource their taxes or only notice the total, not the details, he said, and the newly uninsured might not know that there is a penalty.
“We’re in uncharted territory here,” he said. “This is testing an approach that’s really never been done before. The penalties were really pretty modest in the first two years.”
Paid along with federal taxes in the spring, the penalty is the larger of either a flat dollar amount or a percentage of family income above income-tax filing thresholds. The cap on the penalty is the average premium charged nationally for a bronze plan, the minimum level of coverage available under the ACA. That was $2,484 in 2015 for single coverage and $12,420 for a family of three or more children.
Those who are exempt from the penalty are people whose income is below the tax threshold as well as undocumented immigrants. Those who are uninsured for less than three months won’t face the penalty, and people who are uninsured for part of the year pay a lesser penalty.
Stanley
December 10, 2015 6:41 am
That’s just stupid.
I was talking to a good friend of mine last night who is self employed and uninsured, in her mid 50’s. When she files her tax return she’s going to check the ‘yes’ box on the income tax form where it asks if you have health insurance.
Problem solved.
Even if paying the penalty, it’s a fraction of the cost of ‘insurance’ much less actual health *care*. And the penalty is only recoverable from an owed tax refund. No refund due – no penalty paid.
It’s all just stupid.
card802
December 10, 2015 6:55 am
It is all just stupid.
Which begs the question, once this piece of shit law finally fails, what new and worse piece of shit law are they going to replace it with?
More tax’s and new regulations will be imposed, standard of living will fall, yet the majority will still demand more from the government.
IndenturedServant
December 10, 2015 7:07 am
@Stanley, It’s more than “checking a box” on a form. They want MONTHLY details of your plan.
Personally I can’t wait until all of the sheople who have been conditioned to receive big tax “refunds” start seeing their “refunds” get a haircut. The FSA is likely to revolt!
[img[/img]
Stanley
December 10, 2015 7:26 am
@ IS
My experience so far is that I have never seen nor heard of the form you posted.
We have a CPA that does our taxes. When I saw him this year he asked if we had health insurance and I said yes, employer provided. He checked the ‘yes’ box. Asked for no other information.
IndenturedServant
December 10, 2015 7:33 am
The form above is sent to the IRS by your employer or insurer I believe. (I was sleeping during that part of the meeting.) Isn’t that nice of them?
IndenturedServant
December 10, 2015 7:54 am
The goal of Obammy Care is revenue generation/wealth transfer. You either pay the premiums (wealth transfer) or you pay the penalty (revenue). They don’t really care if you have health insurance as long as you pay. Before long that reduced refund option will become wage/bank account garnishment too.
Anonymous
December 10, 2015 9:45 am
Redistribution of wealth through tax and penalties.Soon if not now underground economy forced by O tyranny
Anonymous
December 10, 2015 9:48 am
More and more congress,pres is unnecessary,irrelevant . Secede!
Anonymous
December 10, 2015 10:10 am
card,
“Which begs the question, once this piece of shit law finally fails, what new and worse piece of shit law are they going to replace it with? ”
Whatever it is I got a feeling that it will end up being presented as we enter a new economic downturn, it will be more expensive no matter who is stuck with paying it, and the taxpayers are least able to afford it.
Seems that economic downturns lately have given an excuse to increase spending an the public seems more than ready to go along with it no matter how unaffordable the spending is. Crate a crisis then present a solution to it and get what you want that you wouldn’t be able to get otherwise.
pablito
December 10, 2015 11:25 am
This is not health care, this is a TAX.
Why would anybody buy a policy, that cost $6k, with a $6k deductible, unless it was required by law.
The next step is to force people to buy insurance to handle their remains, as, you know, it cost money to get rid of your corpse. ( and if you have cooties, it will cost more, cause, you know, plastic bags cost extra)
I am feeling awful cynical today,
perhaps I need to take my medicine….
jamesthewanderer
December 11, 2015 1:01 pm
we THINK we have figured out the health insurance for next year …
Our current plan MAY go up 2 to 2.7 times on the premium, same deductible, same benefits. I sure hope I earn enough next year to pay those premiums!
The form shown above is for employer-provided health insurance: my employer provides none. I have to put in the plan name & number, it’s not just checking a box; but it’s all irrelevant. Health care insurance DOES NOT guarantee health care at need, any more than a police department guarantees police protection! When no one accepts your insurance ( or is available to change your IV or sew up your wound) then what good is your “coverage” or “policy” then? And while you lay there bleeding, who will you complain to / demand from / sue?
Doctors are retiring and not being replaced as quickly; more are leaving and turning to other careers than are going to medical school. THIS is not being addressed in soap operas, TV shows and news reports in general, except for:
“With a physician shortage looming in its sights, in 2006 the Association of American Medical Colleges set a goal of boosting first-year med school enrollment by 30% between 2002’s baseline and 2015.”
“Obamacare is further thinning the doctor corps. A Physicians Foundation survey of 13,000 doctors found that 60 percent of doctors would retire today if they could, up from 45 percent before the law passed.”
It will not get better until this is repealed. Replacement with something better can wait, if necessary. The disease must be cured before rehab can begin.
Will hiking average Obamacare tax penalty to $969 boost enrollment?
By Emma Court
Published: Dec 9, 2015 6:05 p.m. ET
Average tax penalty for uninsured households is jumping 50% to nearly $1,000
Being uninsured in America could cost as much as a MacBook, high-end bicycle or a half-carat engagement ring after an Obamacare tax penalty increases about 50% next year to nearly $1,000.
Households that don’t have health insurance in 2016 will pay on average penalty of $969, according to an analysis released Wednesday by the Kaiser Family Foundation.
Penalties have been deliberately increased over a phase-in period that began in 2014, and this is to be the largest and final jump. The penalty won’t actually be paid until people file their taxes in 2017.
But even the 47% increase from this year’s average $661 tax penalty (payable when taxes are filed in 2016) won’t make health insurance look cheap to most uninsured Americans. In 2016, the penalty will be more than the lowest level of health-care coverage for the 3.5 million uninsured people who qualify for premium subsidies.
But it will still be cheaper to pay the penalty than to buy insurance for the bulk of the uninsured, or 7.1 million people, according to the Kaiser report, which used data from the 2015 Current Population Survey and 2016 marketplaces set up under the Affordable Care Act.
Of course, the size of that gap could shrink or even disappear depending on how much an uninsured person then spends on medical care in the year.
The penalties are the most controversial part of the ACA, part of a push by the Obama administration to encourage millions of uninsured Americans to get health insurance. The belief is that the higher penalty will get people to buy health insurance, said Larry Levitt, a co-author of the Kaiser research, particularly the 3.5 million for whom “it’s a financial no-brainer.”
But “it’s really the big wild card,” he said, since the penalties can only be effective if people know about them. Many people outsource their taxes or only notice the total, not the details, he said, and the newly uninsured might not know that there is a penalty.
“We’re in uncharted territory here,” he said. “This is testing an approach that’s really never been done before. The penalties were really pretty modest in the first two years.”
Paid along with federal taxes in the spring, the penalty is the larger of either a flat dollar amount or a percentage of family income above income-tax filing thresholds. The cap on the penalty is the average premium charged nationally for a bronze plan, the minimum level of coverage available under the ACA. That was $2,484 in 2015 for single coverage and $12,420 for a family of three or more children.
Those who are exempt from the penalty are people whose income is below the tax threshold as well as undocumented immigrants. Those who are uninsured for less than three months won’t face the penalty, and people who are uninsured for part of the year pay a lesser penalty.
That’s just stupid.
I was talking to a good friend of mine last night who is self employed and uninsured, in her mid 50’s. When she files her tax return she’s going to check the ‘yes’ box on the income tax form where it asks if you have health insurance.
Problem solved.
Even if paying the penalty, it’s a fraction of the cost of ‘insurance’ much less actual health *care*. And the penalty is only recoverable from an owed tax refund. No refund due – no penalty paid.
It’s all just stupid.
It is all just stupid.
Which begs the question, once this piece of shit law finally fails, what new and worse piece of shit law are they going to replace it with?
More tax’s and new regulations will be imposed, standard of living will fall, yet the majority will still demand more from the government.
@Stanley, It’s more than “checking a box” on a form. They want MONTHLY details of your plan.
Personally I can’t wait until all of the sheople who have been conditioned to receive big tax “refunds” start seeing their “refunds” get a haircut. The FSA is likely to revolt!
[img
[/img]
@ IS
My experience so far is that I have never seen nor heard of the form you posted.
We have a CPA that does our taxes. When I saw him this year he asked if we had health insurance and I said yes, employer provided. He checked the ‘yes’ box. Asked for no other information.
The form above is sent to the IRS by your employer or insurer I believe. (I was sleeping during that part of the meeting.) Isn’t that nice of them?
The goal of Obammy Care is revenue generation/wealth transfer. You either pay the premiums (wealth transfer) or you pay the penalty (revenue). They don’t really care if you have health insurance as long as you pay. Before long that reduced refund option will become wage/bank account garnishment too.
Redistribution of wealth through tax and penalties.Soon if not now underground economy forced by O tyranny
More and more congress,pres is unnecessary,irrelevant . Secede!
card,
“Which begs the question, once this piece of shit law finally fails, what new and worse piece of shit law are they going to replace it with? ”
Whatever it is I got a feeling that it will end up being presented as we enter a new economic downturn, it will be more expensive no matter who is stuck with paying it, and the taxpayers are least able to afford it.
Seems that economic downturns lately have given an excuse to increase spending an the public seems more than ready to go along with it no matter how unaffordable the spending is. Crate a crisis then present a solution to it and get what you want that you wouldn’t be able to get otherwise.
This is not health care, this is a TAX.
Why would anybody buy a policy, that cost $6k, with a $6k deductible, unless it was required by law.
The next step is to force people to buy insurance to handle their remains, as, you know, it cost money to get rid of your corpse. ( and if you have cooties, it will cost more, cause, you know, plastic bags cost extra)
I am feeling awful cynical today,
perhaps I need to take my medicine….
we THINK we have figured out the health insurance for next year …
Our current plan MAY go up 2 to 2.7 times on the premium, same deductible, same benefits. I sure hope I earn enough next year to pay those premiums!
The form shown above is for employer-provided health insurance: my employer provides none. I have to put in the plan name & number, it’s not just checking a box; but it’s all irrelevant. Health care insurance DOES NOT guarantee health care at need, any more than a police department guarantees police protection! When no one accepts your insurance ( or is available to change your IV or sew up your wound) then what good is your “coverage” or “policy” then? And while you lay there bleeding, who will you complain to / demand from / sue?
Doctors are retiring and not being replaced as quickly; more are leaving and turning to other careers than are going to medical school. THIS is not being addressed in soap operas, TV shows and news reports in general, except for:
http://blogs.wsj.com/health/2010/05/10/med-school-enrollment-in-2015-will-miss-goal/
“With a physician shortage looming in its sights, in 2006 the Association of American Medical Colleges set a goal of boosting first-year med school enrollment by 30% between 2002’s baseline and 2015.”
http://www.forbes.com/sites/sallypipes/2013/06/10/thanks-to-obamacare-a-20000-doctor-shortage-is-set-to-quintuple/
“Obamacare is further thinning the doctor corps. A Physicians Foundation survey of 13,000 doctors found that 60 percent of doctors would retire today if they could, up from 45 percent before the law passed.”
It will not get better until this is repealed. Replacement with something better can wait, if necessary. The disease must be cured before rehab can begin.