Well… my ACA bill is going up to 550 a month and given I'm a single, relatively healthy 57 year old non-smoking male, to me this is not a particularly good deal for the Carefirst Bronze plan with it's 6500 deductible and minimal bennies. In my state (Maryland) the Carefirst plan is the only ACA plan. All other insurers are not playing the ACA game in MD.
So … although I did not vote for Trump, I saw all this talk about the GOP going after the ACA hard and fast and I’m thinking … maybe I can roll the dice and go bare without the IRS coming after me with penalties. Now the news has the GOP kinda-sorta hemming and hawing about killing off Obamacare.
I know the IRS will come after you. I just got a $ 607 penalty bill for not being on ACA in 2015 (I began ACA 1.1.2016) . But now, if I don’t pay the new increased amount starting in 1.1.2107 what are the chances legislation will be passed allowing me to do this without penalty? I was hopeful for these changes now it looks like a lot of the “KILL ACA NOW!!” talk is being walked back. If I don’t pay the currently legally required ACA bill do you think the IRS will still be able to come after people dropping ACA through non-payment with penalties or will this new legislation probably prevent that?
I know no one has definitive answer on this just looking for your thoughts on the likely risks. Paying this required $550 for the high deductible and meager benefits is pretty aggravating.
There is no sure answer because anything could change retroactively. However, I’m telling my clients to assume that changes will be for 2018 and to proceed on the assumption that 2017 will be business as usual.
Since you had 2016 coverage, you have the option of waiting a little bit to see what happens. A short gap in coverage allows you to end the policy December 2016 and then wait to continue coverage until 3/1/17 without any ACA penalties. You’d have about a month of Trump in office before having to make the decision.
I don’t know whether that month would make the answer any more certain, though. Congress would have to be on board, and who knows what they’ll do. I find it very unlikely that they’ll be able to keep what they want about Obamacare (specifically, they want to eliminate the individual mandate while preserving unlimited lifetime limits, 26-year-old dependents, and pre-existing conditions) unless they also keep an individual mandate, and the individual mandate can only be enforced through penalties under the current law. Without an individual mandate, insurance companies will freak out… or pass even higher costs onto the covered population. This is one of many areas where I think reality is going to support the existing compromise regardless of what Trump and the Republicans tweet about.
I wouldn’t expect anything to change soon enough to affect your ACA penalty for 2017. It sounds pretty simple though: you know what the penalty will be in 2017 (700 or thereabouts), versus 6600 for insurance plus another 6500 before you see any benefits from that insurance, so basically 700 versus 13,000 bucks.
Not what you asked but, some ramblings:
All this is why ACA is a far-from-perfect option (and I had no clue Maryland’s insurance situation was so dire).
At your age, if anything does happen there’s a fair chance it’ll be very expensive (heart disease, cancer, and so on).
With the ACA coverage, even with a high-deductible plan I think preventive care is covered - e.g. some screenings, colonoscopy, and the like. I might be wrong about that, but it’s an example where that 6500 is actually getting you something.
With that big a deductible, you’d sure think the premiums would be lower! I checked the W2 from last year and the employer cost was just over 10K, plus 2600 employee premiums - so about double yours, for similar age, two adults and two adult children, and a MUCH lower deductible. So, not a LOT lower but significant especially considering the lower deductible.
If you do decide to "go bare’ next year, please please please self-insure: put the premiums (and deductible) aside someplace you won’t spend it.
I understand this thought, but…why? Routine stuff he can just cover, and no amount of “self-insurance” can hope to cover anything more than routine stuff in the US health care system. Anything that involves surgery or more than outpatient term care will simply bankrupt anyone but the top 10% or so of income earners unless they’re insured. Self-insurance is like building a sandcastle to stop a tsunami.
OP you need to look at what you have in terms of assets. If you have significant assets (other than your home) you are going to lose most of them in a bankruptcy after a major medical event.
I am quite sure Obamacare will continue as is for next year anyway and probably two years. Even if they were to decide immediately to go back to the old system they still need a year or two of transition for the old policies to be set up again.
Thanks for the info I did not realize there was $ 695 annual limit to the penalty. I somehow had it in my head they would be expecting something close to the equivalent of the available plan. That’s very useful info. Thank you!
Still, that means the penalty is substantially lower than the cost of insurance. Even someone with 100,000 of household income is only looking at 2,500 of penalty.
Also remember that in the event of a major medical event that is not considered “emergency”, you can and as an uninsured patient almost certainly will be expected to pre-pay at least part of your treatment.
It’s an older article (2008), but cash before chemo is still a thing–you want an appointment to discuss cancer treatment, you pay twenty or forty or a hundred thousand dollars up-front, in certified funds, with additional payments due as treatment progresses. Many hospitals are no longer willing to risk the chance that you’ll go bankrupt on them, and if you are not in immediate danger of expiring this afternoon, they probably have no obligation to provide treatment.
Are there still super-high-deductible limited plans that aren’t ACA-compliant, but that might keep you from going bankrupt in case of medical catastrophe? I broke my leg really badly in 1996 when I was 2 days short of having medical coverage on a new job, and thankfully the new plan (being a group plan, and I’d only been uninsured for a month) covered preexisting conditions. But if it hadn’t, I would have been on the hook for $100k in surgery, hospital stays, rehab, etc. - and that was in 1996 dollars.
But, if the OP is thinking of doing without the insurance and just paying the penalty, I’m just urging him to at least put the money aside anyway - versus thinking “hey, I saved 13,000 dollars - time for that fancy vacation!!”. Like I said, anything happening at that age is likely to be very, very spendy (but the 13K put aside would be better than nothing).
Hell, it wouldn’t even cover routine stuff given how insane “rack rates” are for procedures (I’ve vented about this before here). You can often negotiate prices down saying you’ll be paying cash but the American healthcare system’s billing practices are so wacked-out, you have no clue what anything will really cost.
I’m not saying the OP would be able to buy one and thereby avoid the tax penalties for not having an ACA-compliant policy. But it might keep him from losing his shirt if the unthinkable happened.
It’s a little of both, actually. The IRS has said that they will not enforce collection if the only tax due results from the ACA penalty.
However, they will certainly apply excess payments from any other years to the open balance. So, at best, you’d avoid paying the ACA penalty only if you never have a refund again for your entire life.