# Explain the health insurance penalty to me. **URL:** \ **Category:** Factual Questions\ **Created:** [March 9, 2015, 7:55pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629 "2015-03-09T19:55:36Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Tim\_T-Bonham.net](https://avatars.discourse-cdn.com/v4/letter/t/46a35a/32.png) [@Tim\_T-Bonham.net](https://boards.straightdope.com/u/Tim_T-Bonham.net)\ **Post date:** [March 12, 2015, 1:37am UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/21 "2015-03-12T01:37:23Z")
> [@Diceman](#): > > 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! NO! That gift is to the health insurance industry – which is NOT health care. ---
**Author:** ![What\_the](https://avatars.discourse-cdn.com/v4/letter/w/f4b2a3/32.png) [@What\_the](https://boards.straightdope.com/u/What_the)\ **Post date:** [March 12, 2015, 3:55pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/22 "2015-03-12T15:55:27Z")
In addition to being penalized for not having proper coverage, there are adverse consequences for getting a subsidized policy based on assumptions that were wrong. If you’re income is higher than that used to calculate your subsidy you have to pay some or all of it back. I realize that isn’t a “penalty” really. I believe that all of the penalties are set to increase significantly for 2015…anybody know how much? Twice, three times? …and on into 2016 and beyond?? ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [March 12, 2015, 4:39pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/23 "2015-03-12T16:39:24Z")
> [@What\_the](#): > > I believe that all of the penalties are set to increase significantly for 2015…anybody know how much? Twice, three times? …and on into 2016 and beyond?? [Kaiser Family Foundation](http://kff.org/infographic/the-requirement-to-buy-coverage-under-the-affordable-care-act/) has a good summary. There are many exemptions, but if subject to the penalty it is : 2014 : $95/adult, $47.50/child, $285/family or 1% of income, whichever is greater 2015 : $325/adult, $162.50/child, $975/family or 2% of income 2016 : $695/adult, $347.50/child, $2085/family or 2.5% of income After 2016, cost of living increases are applied. The penalty will never be more than the national average Bronze plan premium. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [March 12, 2015, 5:37pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/24 "2015-03-12T17:37:47Z")
> [@DrCube](#): > > Unless the penalties are larger than the insurance premiums, this will never work. Sure it will. They don’t have to be larger, just large enough that the combined penalty and benefit (of having insurance) are greater than the benefit of not having insurance. It’s not as though health insurance is a useless product that nobody buys independent of the mandate. ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [March 12, 2015, 5:48pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/25 "2015-03-12T17:48:17Z")
> [@Chronos](#): > > The other dodge is people who don’t buy insurance, get sick or injured, and then immediately buy insurance once it’s needed. Well, not immediately. You have to wait until open enrollement. So this year, if you break your leg in April, you would have wait until January 2016 to get it set. Not exactly gaming the system. ---
**Author:** ![Honey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honey/32/5074_2.png) [@Honey](https://boards.straightdope.com/u/Honey)\ **Post date:** [March 13, 2015, 11:50am UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/26 "2015-03-13T11:50:51Z")
> [@slash2k](#): > > 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. Wow. I had no idea the change was this severe. I feel very fortunate to be receiving Medicaid. My medications would cost over $500 per month. With Medicaid they’re $3.00. ---
**Author:** ![Honey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honey/32/5074_2.png) [@Honey](https://boards.straightdope.com/u/Honey)\ **Post date:** [March 13, 2015, 12:57pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/27 "2015-03-13T12:57:46Z")
In case you’re wondering. I care for my mom full time, I’m not a deadbeat. 😉 ---
**Author:** ![Lord\_Feldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lord_feldon/32/341_2.png) [@Lord\_Feldon](https://boards.straightdope.com/u/Lord_Feldon)\ **Post date:** [March 13, 2015, 1:15pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/28 "2015-03-13T13:15:33Z")
> [@Honey](#): > > Wow. I had no idea the change was this severe. I feel very fortunate to be receiving Medicaid. My medications would cost over $500 per month. With Medicaid they’re $3.00. It was a very common misconception before Obamacare too, right up there next to getting free care at the emergency room. I actually heard it used as a reason why we didn’t need any changes, because hey, if you’re too poor to get insurance, you can just go get Medcaid! > [@What\_the](#): > > In addition to being penalized for not having proper coverage, there are adverse consequences for getting a subsidized policy based on assumptions that were wrong. If you’re income is higher than that used to calculate your subsidy you have to pay some or all of it back. I realize that isn’t a “penalty” really. That’s how your taxes always work, though. Maybe the subsidies involve a little more risk for an average taxpayer, but our tax system is based on paying as you go based on assumptions, then checking to see if they were correct when the year ends. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [March 13, 2015, 1:19pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/29 "2015-03-13T13:19:08Z")
> [@slash2k](#): > > SHOULD BE, but frequently are not in the states that did not expand Medicaid. See [2015 eligibility by state](http://kff.org/medicaid/fact-sheet/where-are-states-today-medicaid-and-chip/). For example, in 21 states childless non-disabled adults are not eligible for Medicaid, period. The FPL income for a childless single person is 11,670. That’s part-time minimum wage job territory- you literally can’t have a minimum wage job and be at that level as a single person. For comparison, that’s about 30 hours a week at minimum wage, or 20 hours a week at $11.23/hr. How many people are actually in that situation? I have a feeling that when you’re looking at the actual numbers on a national scale, this is a non-issue. It surely sucks for the people in that situation, but out of 300 some-odd million, how many people does this actually encompass, and is it even worth worrying about? ---
**Author:** ![Honey](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/honey/32/5074_2.png) [@Honey](https://boards.straightdope.com/u/Honey)\ **Post date:** [March 13, 2015, 1:50pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/30 "2015-03-13T13:50:28Z")
> [@Really\_Not\_All\_That\_Bright](#): > > Sure it will. They don’t have to be larger, just large enough that the combined penalty and benefit (of having insurance) are greater than the benefit of not having insurance. It’s not as though health insurance is a useless product that nobody buys independent of the mandate. I was once in a place in my life where I couldn’t even afford to buy food. Insurance back then would have had no value to me. I would have had to pay whichever was less. The penalty, or the insurance. Even that would have had to be borrowed from someone to pay. ---
**Author:** ![wevets](https://avatars.discourse-cdn.com/v4/letter/w/e9a140/32.png) [@wevets](https://boards.straightdope.com/u/wevets)\ **Post date:** [March 13, 2015, 2:12pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/31 "2015-03-13T14:12:02Z")
> [@bump](#): > > The FPL income for a childless single person is 11,670. That’s part-time minimum wage job territory- you literally can’t have a minimum wage job and be at that level as a single person. > > For comparison, that’s about 30 hours a week at minimum wage, or 20 hours a week at $11.23/hr. How many people are actually in that situation? > > I have a feeling that when you’re looking at the actual numbers on a national scale, this is a non-issue. It surely sucks for the people in that situation, but out of 300 some-odd million, how many people does this actually encompass, and is it even worth worrying about? As of March 2013 (the most recent time when census numbers are available) the Census Bureau’s [Income and Poverty Report](https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf) indicates that at a poverty level of $12,119 for single individual under age 65 and $11,173 for a single individual over age 65 (further poverty levels per household size can be found in Appendix B) 45,318,000 people in the United States live below the poverty level, or about 14.5% of the U.S. population. (see Table 3) ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [March 13, 2015, 2:20pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/32 "2015-03-13T14:20:14Z")
> [@Honey](#): > > I was once in a place in my life where I couldn’t even afford to buy food. Insurance back then would have had no value to me. I would have had to pay whichever was less. The penalty, or the insurance. Even that would have had to be borrowed from someone to pay. I absolutely dread posting anything in this thread due to the political aspect of the topic but I believe that in the case you are describing would qualify you for free healthcare, all you need to do is sign up. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [March 13, 2015, 3:59pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/33 "2015-03-13T15:59:52Z")
> [@slash2k](#): > > 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.) As I understand it (don’t know, am Canadian) if you NEED the heart surgery and have no coverage, the hospital must provide it. However, if there is a simpler, cheaper option that insures you won’t die immediately, (i.e. stabilize your condition) that’s all they have to provide for an uninsured patient. And of course, the treatment for uninsured who cannot pay is absorbed ultimately by billing a bit more for those who can pay - hence the desire to force even healthy people who have means, to go and buy insurance. The goal was that nobody be uninsured. > [@slash2k](#): > > 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. If I recall the debate, wasn’t that a limited mandate - the ACA would pay for the first X years, but the fear was that eventually the feds’ share would dwindle and the states would be stuck with all these extra people to cover and no increased federal assistance? Alternatively, this funding was not the primary consideration, instead the decision against expansion was Republicans trying to make the system work badly so failure would “be Obama’s fault”. (not a political jab but a statement of the politics of the situation). ---
**Author:** ![Tim\_T-Bonham.net](https://avatars.discourse-cdn.com/v4/letter/t/46a35a/32.png) [@Tim\_T-Bonham.net](https://boards.straightdope.com/u/Tim_T-Bonham.net)\ **Post date:** [March 13, 2015, 10:15pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/34 "2015-03-13T22:15:52Z")
> [@md2000](#): > > And of course, the treatment for uninsured who cannot pay is absorbed ultimately by billing a bit more for those who can pay - hence the desire to force even healthy people who have means, to go and buy insurance. The goal was that nobody be uninsured. NO! The goal was that nobody would be without health care. But the insurance companies & other players have so controlled the discussion on this in the USA that people constantly confuse the two. (As a Canadian, I’d think you would understand that, eh? 🙂 I’d say more on this if we weren’t in GQ. ---
**Author:** ![Musicat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/musicat/32/20189_2.png) [@Musicat](https://boards.straightdope.com/u/Musicat)\ **Post date:** [March 13, 2015, 10:20pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/35 "2015-03-13T22:20:54Z")
> [@Mrdeals](#): > > Where does the penalty money go? Into the pockets of the general fund. Amazing, isn’t it 🙂 how taxes are raised sometimes? Under the guise of “we know what’s good for you and you don’t”? ---
**Author:** ![Fear\_Itself](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fear_itself/32/19637_2.png) [@Fear\_Itself](https://boards.straightdope.com/u/Fear_Itself)\ **Post date:** [March 13, 2015, 10:24pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/36 "2015-03-13T22:24:24Z")
> [@Musicat](#): > > Amazing, isn’t it 🙂 how taxes are raised sometimes? Under the guise of “we know what’s good for you and you don’t”? You say that like it’s a bad thing… ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [March 14, 2015, 5:25pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/37 "2015-03-14T17:25:36Z")
> [@](#): > > …The goal was that nobody be uninsured. > [@t-bonham@scc.net](#): > > NO! > The goal was that nobody would be without health care. > > But the insurance companies & other players have so controlled the discussion on this in the USA that people constantly confuse the two. (As a Canadian, I’d think you would understand that, eh? 🙂 > > I’d say more on this if we weren’t in GQ. Pot-ay-to, pot-ah-to? Or is Medicare not considered insurance? I understand the _ideal_ was health care for all. It seems to me that the goal of the ACA was that everyone participate in their own insurance, subsidized insurance, or government Medicare insurance. The tax/penalty was to “incentivize” people to buy insurance if they hadn’t. Mind you it’s still not “having health care”. Canadian health care may not cover as much as some US minimums, but we have no deductibles, co-pays, or whatever that I understand US insurance plans tend to have. The biggest expense someone in Canada has when they go into the hospital is the parking fees their relatives pay when visiting them, and rental to use the TV in their room. How much could a family of 4 conceivably be out of pocket in cash expenses each year for covered procedures, even if insured by a plan that meets ACA standards? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [March 14, 2015, 5:54pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/38 "2015-03-14T17:54:16Z")
> [@wevets](#): > > As of March 2013 (the most recent time when census numbers are available) the Census Bureau’s [Income and Poverty Report](https://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf) indicates that at a poverty level of $12,119 for single individual under age 65 and $11,173 for a single individual over age 65 (further poverty levels per household size can be found in Appendix B) 45,318,000 people in the United States live below the poverty level, or about 14.5% of the U.S. population. (see Table 3) But how many of those are childless and non-disabled adults who live in the 21 states that don’t offer Medicaid for those people? **Bump** ’s point is a good one. If you are an able-bodied adult, with no children that you have to care for, it seems that you ought to at least be able to get a minimum wage job and then be eligible for a subsidy. And at that income level, it would be a full subsidy: the entire cost of an ACA bronze level plan. Of course, with a bronze level plan, you have a $6k deductible which for most able-bodied adults means you never benefit from the insurance, but that is GD territory. ---
**Author:** ![actualliberalnotoneofthose](https://avatars.discourse-cdn.com/v4/letter/a/e79b87/32.png) [@actualliberalnotoneofthose](https://boards.straightdope.com/u/actualliberalnotoneofthose)\ **Post date:** [March 14, 2015, 11:10pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/39 "2015-03-14T23:10:55Z")
> [@bump](#): > > The FPL income for a childless single person is 11,670. That’s part-time minimum wage job territory- you literally can’t have a minimum wage job and be at that level as a single person. > > For comparison, that’s about 30 hours a week at minimum wage, or 20 hours a week at $11.23/hr. How many people are actually in that situation? > > I have a feeling that when you’re looking at the actual numbers on a national scale, this is a non-issue. It surely sucks for the people in that situation, but out of 300 some-odd million, how many people does this actually encompass, and is it even worth worrying about? Maybe I’m not reading this correctly, but are you claiming that there are not millions of people who earn somewhere between the poverty line and the minimum income to qualify for the health insurance subsidy? I would think the people who exist within this gap- the “working poor”- who make too much for Medicaid or are otherwise ineligible for it in their state but also do not have access to employer provided insurance and make too little for subsidized health insurance- are the main people we should be “worrying about.” I’m pretty sure insuring these people was pretty much the main point of the whole thing. ---
**Author:** ![actualliberalnotoneofthose](https://avatars.discourse-cdn.com/v4/letter/a/e79b87/32.png) [@actualliberalnotoneofthose](https://boards.straightdope.com/u/actualliberalnotoneofthose)\ **Post date:** [March 14, 2015, 11:16pm UTC](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629/40 "2015-03-14T23:16:39Z")
> [@jtgain](#): > > But how many of those are childless and non-disabled adults who live in the 21 states that don’t offer Medicaid for those people? > > **Bump** ’s point is a good one. If you are an able-bodied adult, with no children that you have to care for, it seems that you ought to at least be able to get a minimum wage job and then be eligible for a subsidy. And at that income level, it would be a full subsidy: the entire cost of an ACA bronze level plan. > > Of course, with a bronze level plan, you have a $6k deductible which for most able-bodied adults means you never benefit from the insurance, but that is GD territory. Might be a good point, but the subsidy level is not poverty level. There is a gap. Also, I think most minimum wage jobs are part-time. It might be possible to have 2-3 minimum wage-ish jobs in theory, and I knew plenty of people who worked multiple jobs in the past. But yet, and I guess I might be in IMHO territory here- those types of jobs tend to have policies such as requiring 24/7 open availability with no consistent scheduling and/or are seasonal/highly unpredictable. My best friend, for example, is a college graduate who has 3 jobs. He did not make enough in 2014 for a subsidy and refuses to look into Medicaid out of principle (but he would not be eligible for either in a non-Expansion state). [Previous page](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629.md?page=1) [Next page](https://boards.straightdope.com/t/explain-the-health-insurance-penalty-to-me/714629.md?page=3)