What if I Don’t Buy the Mandated Health Insurance?

Some of you are saying, “The government cannot force me to buy insurance. I’m just not going to do it. I’m young. Insurance is for ‘old people’. I don’t get sick so I don’t need it.” Well, that may be true in some regard. Many people are prone to be naturally healthy. But what about that one time, when it’s snowy and icy, or wet and slick, and you just happen to step down from your porch and whoops your feet go out from under you and you break your arm in the fall. Now what are you going to do? Ice it down and take loads of aspirin and hope it mends on its own? Go to your nearest Urgent Care or maybe even the Emergency Room? I don’t know if you have ever been treated in an emergency room but I have and those costs are expensive!! This is where insurance sure is nice to have. You could be out hundreds if not thousands of dollars depending on how bad that break is. Maybe it’s only a hairline fracture. But maybe, it ends up breaking the bone in multiple places and you end up with pins. Purchasing insurance, either through a private provider on the open market, or through a state/federally assisted marketplace, will definitely help to offset your out of pocket expenses. Equate having health insurance to having car insurance. Granted, you aren’t going to use your insurance every day but it sure is nice to have it when you slide through that icy intersection on your way to the Urgent Care and you hit someone’s car.

Ok, so the logic of paying for that “just-in-case-scenario” still doesn’t convince you to buy the mandated health insurance that is required beginning in 2014 under the Patient Protection and Affordable Care Act (PPACA or the ACA for short). Not so fast. You are not off the hook under the requirements of the PPACA*. If you don’t have the minimum essential coverage of health insurance you will be charged a penalty (also called a tax). Yep, you will be penalized and it will rise on a yearly basis. Here is what has been identified so far for the first three years beginning in 2014. In 2014, you must pay $95 PER adult (and $47.50 per child, up to $285 for a family) OR 1% of family income (whichever is HIGHER). In 2015, the penalty rises to $325 PER adult (and $162.50 per child, up to $975 for a family) OR 2% of family income (whichever is HIGHER). And, in 2016, the penalty is $695 PER adult (and $347.50 per child, up to $2,085 for a family) OR 2.5% of the family income (whichever is HIGHER). Note, as well, that the family income equates to the TOTAL income of ALL family members not just the adults/parents (i.e., your 17-yr old son’s income from the fast-food restaurant). So, you can see that opting out of healthcare coverage can be very expensive for you and/or your family in the long run. Plus, having insurance should give you some peace of mind in case of that unlucky, untimely, whoops off the front porch.

* Note there are a few exemptions to the purchasing requirement but we aren’t going to go into them in this discussion.

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