Went to get my taxes done today and the VERY first thing I was asked was to see my health insurance.
I didn’t really ask, but I assumed it was to see if I would receive a penalty on my taxes.
My question is, do people getting the penalty receive health coverage?
If not, what is the point of penalizing a person who either cannot afford health insurance, or who refuses to get coverage?
Where does the penalty money go?
The point is to encourage/pressure everyone into getting health coverage, as a step to getting everyone health care.
And people who can’t afford it get subsidies, so they can afford it. it’s those who willfully refuse to get coverage, then when the get sick or injured end up being treated by emergency rooms and not paying, so the rest of us taxpayers pay for them – those are the ones who are ‘penalized’.
This isn’t really true, though it was supposed to be the whole point. Now we’re in some Marie Antoinette-esque “Make them buy healthcare” bizarro version of the ACA. They really do issue unaffordable penalties to people now for the sin of not being able to afford health insurance.
It gets collected when you file your federal income taxes. That’s why they asked - it’s a specific line on your 1040. It’s more or less a tax.
As far as I know, it goes where your other federal income tax money goes, unless there’s been new legislation to do something special with it.
Not exactly, as best I understand it. People whose income is 100% to 400% of the official poverty level can get a subsidy to help pay for their insurance.
Apparently, people whose income is less than 100% of the official poverty level (you know, the people who most need a subsidy) don’t get one. Instead, they are exempt from having to have insurance. So they are a population who remain uninsured, and if they get sick they go the ER I suppose or die in the gutter.
People whose income is below the poverty line should be eligible for their states’ MedicAid or Medical Assistance program, which would provide them with basic care.
Never mind. There was an awful lot of non-GQ in my reply, so I deleted it.
SHOULD BE, but frequently are not in the states that did not expand Medicaid. See 2015 eligibility by state. For example, in 21 states childless non-disabled adults are not eligible for Medicaid, period.
Well, it’s about what you would expect – slave states & cow states.
People paying the penalty do not receive health insurance. Others overstated the requirement of emergency rooms at hospitals. The Emergency Medical Treatment and Active Labor Act requires hospitals that receive Medicare payments to stabilize any patient without regard for ability to pay. There are no reimbursements. However the hospital is not required to provide non-emergency care, though many do finding it cheaper than waiting for the next inevitable emergency. (e.g. Cheaper to give the diabetic patient insulin than wait for him to show up a few days later in another diabetic coma.)
There are exemptions to the penalty that may apply to low income persons. If the benchmark insurance plan costs more than a certain percent of your income then you will not be charged a penalty if you do not buy the coverage. But you won’t have health insurance.
Persons who refuse to get coverage who can afford it, according to the formulas in the law, will be charged a penalty (assuming they do not qualify for some other exemption). This is to encourage enough participation to provide a viable insurance pool.
The other dodge is people who don’t buy insurance, get sick or injured, and then immediately buy insurance once it’s needed. This used to be prevented by insurance companies not covering pre-existing conditions, but that’s no longer allowed, so something else needs to prevent it.
First off, I don’t believe the penalties are unaffordable, at least not at first. As I understand it, the penalties start off small, then get larger over time. The intent is to encourage people to get insurance.
Secondly, I have absolutely no problem charging people for not having insurance, whether you call it a penalty, a tax, or a fee. As it is now, people without insurance are one accident or serious illness away from ending up in the ER, and sticking the rest of us with the bill.
(Of course, single-payer universal health care would be even more preferable, but that’s a separate discussion.)
Unless the penalties are larger than the insurance premiums, this will never work.
And yes, when you work the kind of job that doesn’t provide healthcare, a $700 bill at tax time is quite often unaffordable. Not that it isn’t cheaper than a >$6000/year insurance premium, but when you can’t buy food until payday, both of those bills might as well be a million dollars.
That brings us to the next problem. Those “affordable” health care plans inevitably come with a very high deductable. (That’s how they can make them so cheap.) So, really, if you couldn’t afford to get sick before you still can’t, because your health plan won’t kick in any meaningful amount of coverage untill you’ve already laid out a pretty decent amount of money.
At the end of the day, it look less like socialized healh care, and more like a generous gift to the healthcare industry: millions of new customers!
And as for the states that didn’t expand Medicare, did the ACA provide any funding for that, or was it an unfunded mandate?
Those affordable health plans also come with a basic amount of preventative care, such as an annual physical and certain immunizations covered with no deductible. Also, if you have a $5-10K deductible but coverage beyond that, medical facilities are more likely to be willing to work with you to cover a very serious situation because they know they’ll be paid something, whereas if you have no coverage at all they can decline to treat any non-emergent condition. (That is, if you need a $50K heart surgery but the hospital has assurances they’ll get $35-40K from your insurance, getting them to write off and/or finance the last bit is easier than trying to convince them to write off all $50K.)
Yes, the ACA provided that the feds would pay most of the cost of expanded MedicAID (not MedicARE), but the June 2012 SCOTUS decision said the states could not be compelled to expand Medicaid, and twenty-two states declined to pass the enabling legislation.
I have a serious question about this notion of “sticking the rest of us with the bill.”
If someone doesn’t have insurance and can’t pay, the hospital will increase the cost of healthcare for everyone else to make up the loss. So, in effect, the rest of us get to pick up the bill. Go that.
If someone HAS insurance, the insurance company pays the bill. But now the insurance company will raise their rates to cover the costs of providing insurance. As healthcare costs go up (people utilize healthcare), health insurance rates go up. So, once again, the rest of us get to pick up the bill, albeit in a slightly different avenue.
No? What am I missing?
Insurance by its very definition is merely spreading the bills around. However, if the insurance actuaries did their job the rates are ALREADY set to cover the costs of providing insurance, so they don’t need to raise them further just to cover somebody’s utilization.
When more people join the pool, some of them will be net payers (use less health care than average), while others will be net consumers (use more than average amounts). It’s the company’s goal to balance those two so the amount paid by the new members pays the claims of the new members.
I see your point, but in the end the more insurance is utilized the more it costs the insurance company and the more we all pay. But even if that weren’t true, paying an insurance company is no different than paying the hospital directly. It is a pooled risk either way. If someone skips out on an emergency room bill they haven’t paid anything towards the pooled risk. Someone with insurance is still raising the cost for all of us, but they have partially paid for that care.
That’s not true. The insurance is worth something to most people, even if it’s not worth the premium. So, the penalty just has to cover the difference for people to make the financially rational decision to get insurance. Not everyone makes rational decisions, and not everyone values insurance enough that the penalty will tip the scales, but it will have an effect even if it’s less than premiums.
A lot of insurance companies have responded by simply refusing to sell individual polices at price to anyone trying to sign up outside the Open Enrolment Period unless they have a Qualifying Life Event (which does not include getting sick, into an accident, or pregnant).