The Affordable Care Act’s “Penalty”: If You Don’t Buy Health Insurance in 2014, How Much Will You Pay?

Note to readers; a longer version of this post originally appeared on, along with a penallty calculator.

Despite the hullabaloo about the Affordable Care Act’s mandate that nearly everyone puchase heath insurance in 2014–or pay a penalty–the Congressional Budget Office estimates that only 1.4 percent of Americans will wind up paying the tax.

That is because the vast majority of us either have health insurance, or are exempted from the mandate for any one of a number of reasons.  For example, at the end of 2014 you will owe no tax if:

  • your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income;
  • your income is below the income tax filing threshold, and so you’re not required to file taxes;
  • you were uninsured for less than three months of the year (If over three, the penalty is pro-rated);

As a result the Urban Institute estimates that just 6  percent of the population (roughly 18 million Americans) will even have to consider the question: “Should I purchase health insurance, or pay a tax?” That’s right: a whopping 94 percent of the population will have no reason to worry about paying a penalty.

And 11 million of that 18 million will be low-income or middle-income Americans who are eligible for a government subsidy to help cover the cost of their premiums. Chances are, most of them will take the government up on its offer.

That still leaves about 7 million Americans who are uninsured today and won’t qualify for a subsidy.  But many of them lack coverage because they suffer from a pre-existing condition.  As a result,  most insurers won’t sell them a policy, and those who will cover them demand sky-high premiums.  Under the ACA, insurers will no longer be able to shun the sick; nor will they be able to charge them more.

If You Decide to Gamble, And Go Without Insurance, How Much Will You Pay?

Inevitably, some people will decide not to buy comprehensive insurance because they’re healthy and wealthy enough that they feel they can cover their own medical expenses. Others wil refuse to purchase a policy as a matter of principle: some Americans just don’t like the  insurance industry, and resent being told they should buy their products.

The size of the tax they pay will depend on how many people are in their household, and how much they earn.In  2014 an individual who earns $35,000 and chooses to opt out will owe just $95– though if he earns $250,000, he’ll wind up paying $2,500 or roughly 1% of adjusted gross income above $9,500.  (The tax applies only to income above and beyond the filing threshhold; in 2011 that was $9,5000 for most singles and $19,000 for most married couples. )

Over the next two years, the penalty rises. In 2016, a middle-income family of four earning $60,000 would owe about $2,085 – still far less than the tax a more affluent family would pay. (For example, a household reporting adjusted gross income of  $200,000 would owe roughly $4,300. In other words, this is a progressive tax

But there is a cap on how much any household will owe: according to the law the tax cannot exceed the national average premium for “bronze level” health plans offered through exchanges. These bronze plans will  cover 60 percent of  medical expenses, and the Congressional Budget Office (CBO) estimates that in 2016 the average premium would be about $4,750 for single policies and $12,250 for family policies. (This sounds expensive, but keep in mind that  middle-class  Americans who don’t have employer-based insurance will receive subsidies from government to help cover the cost. For example, a family of three earning $54,930 would end up paying just $5,218 for a “silver” plan that covered 70% of the family’s  medical expenses.

Why is the penalty so high? Because if a healthy wealthy person decides to opt out–and then later becomes sick– he will be able to change his mind and buy insurance. The point of the Affordable Care Act is to make sure that everyone has access to healthcare; no one will be barred from the system.  At the same time, it’s not fair to let someone wait until they are sick before entering the insurance pool while others have been paying into that pool for years.  So those who choose not to buy coverage will pay penalties in lieu of premiums –and those taxes will keep our heatlh care system afloat.

Penalty Calculator

I’ve written a more detailed post for  describing exactly how the penalty works, and answering some “frequently asked questions” about the tax. I have also helped develop a penalty calculator. If you type in a few facts about yourself and your household, the calcualtor will tell you how much you would owe in 2014, in 2015 and in 2016.



102 thoughts on “The Affordable Care Act’s “Penalty”: If You Don’t Buy Health Insurance in 2014, How Much Will You Pay?

  1. I am concerned about the persons for whom health premiums will be over 8% of income, even after subsidies.

    Let me try and create a composite person in this group.

    They are 55 years old and their age-rated premium (even in the exchange) is $700 a month.

    Their federal subsidy is $400 a month.

    So their out of pocket premium is $300 a month.

    But their income is just $30000 a year. 8% of that is
    $2400 or $200 a month.

    They would not get Medicaid if they were single and had that income.

    What I think you are saying is that they could go ahead and pay their $300 a month, it is not such a bad deal.

    But if they did nothing, they would pay no tax.

    Is this correct?

  2. Bob–
    Yes, if they chose to opt out, they would owe no penalty.
    But $300 a month of Comprehensive health care is a Very Good deal. (Today, most people in that tax bracket have very spotty health insurance— unless they work for a very wealthy corporate employer.)

    Under the Affordable Care Act, both people who don’t have employer- sponsored insurance, and those who work for smaller companies will enjoy the protection of the ACA:

    –No co-pays or deductibles for preventive care
    –Dental and vision care for children
    –There will be no limit how much the insurer will pay out in a given year or over a lifetime.
    (If you develop cancer or MS–or have a baby that needs to stay in the hospital for 2 months, this means you can keep your home, and won’t be wiped out.)
    –If you are a young person, and unexpectedly become pregnant, your insurance Must cover prenatal care, maternity benefits, post-natal care. (Today many polices do not cover any of the above.)
    –Also , under the ACA, there is a cap on how much these policies can ask you to pay, out of pocket, in co-pays and deductibles. (For people earning $30,000, the cap is low. It’s higher if you earn more.)
    So all and all, what you’re getting is well worth the cost (after the subsidy). Even a family earning $30,000 can afford this. I would cancel cable (which these days is a rip-off)– to have this insurance.
    (There are good altneratives to cable.)

    • In October of 2013 I will be 61. I work part-time and have no employer health care coverage. My spouse is 66 and has medicare. With his social security and small pension and my earnings, our total income for 2014 will be about $48000. Perhaps around $40000 adjusted after taxes. Will I qualify for a subsidy? Thank you.

      • Mary H.

        Yes, you will qualify for a subsidy. (An individual earning less than $46,000 will qualify, so the two of you
        will definitely be eligible.

        I’ll be writing more about subsidies for couples, families of 3, families of 4 and families of 5 in the near future.

  3. Let me preface my comment by saying that I have been in employee benefits for almost 30 years.
    It is a little presumptuous to assume that the Insurance Exchange premiums will be affordable when the rates won’t even be published until mid-2013.
    Considering the narrow rating bands between the young and the old the younger ages will be paying more than they are now for like-coverages.
    And employer health plans, regardless of the size of business written, cover pre and post natal care because in most states maternity coverage is mandatory.
    And, if someone can truly wait until they get sick to get into the system the ACA act will indeed become the Risk Pool of choice.
    The bottom line is that without hard numbers as to what people will be paying in premium all of the net-cost projections are speculative at best.

  4. Henry–
    Thank you for your comment.
    You are absoutely right that we don’t know how high the premiums will be. All the CBO can do is “guesstimate.”
    However, if premiums are higher, the subsidies also will be higher, making up the difference. So for low-income and middle-income Americans eligible for subisidies, higher premiums should not prevent them from buying insurance.
    In some states, you are right, younger people will be paying more. In other states (such as New York, where, today, insurers can not charge older customers more and cannot charge more because of pre-existing conditions) younger people may well wind up with premiums that are about the same as they are today. They could even be lower if enough young, healthy people who do not have insurance today join the pool–contributing premiums, but not needing a great deal of care.
    Also in some states, older people will pay premiums that are 3 times higher, in other states–and so younger people will not be paying for a very large share of their care. In other states, older people will pay twice as much, and in still other states they wil pay no more than younger people.(The ACA lets insurers charge older customers up to 3 times as much–but only if state law doesn’t bar or cap “age-rating.”)

    As for employers providing pre-natal care and maternity benefits–only 44% of Americans now have employer-based insurance. The majority do not.
    In the individual market where women must buy insurance if they are self-employed, un-employed, or working for an employer who doesn’t offer affordable insurance coverage, only 13% of policies cover maternity. And if a women becomes pregnant and wants to “upgrade” to a policy that does cover maternity, she will find that she can’t. (Pre-existing condition.)
    Finally, and most importantly, today premiums are so high because the underlying cost of care is so high–mainly because of too much overtreatment, and because we overpay for some very high-priced products and services. Some hospitals charge far more for exactly the same relatively low-tech service (for instance normal delivery of a baby) than others. (One reason–and this is just one reason–is that some hospitals don’t let nurse-midwives deliver. Only an Ob-gyn can deliver.. They are more expensive, and reserach shows, are more likely to encourage women to “induce” labor and to have a C-section. (This is why many women, including my daughter, who recently had a baby prefer nurse-midwives.) Outcomes are as good or better. The nurse-midwives also offered excellent pre-natal care.
    There is good reason to believe that under health care reform, hospitals, in particular will be able to cut their costs, and thus their bills will be lower. Already, the bills they are sending to Medicare are lower, and when it comes to demanding better care at a lower cost (fewer preventable mistakes, fewer preventable readmissions, fewer unnecessary tests, catherizations, inappropriate implantation of debribillators, etc. private insurers say they are going to follow Medicare’s lead.)
    Many private insurers will be joining with doctors and hospitas to create “accountable care organizations” where they will share in the savings. The insurer and health care provider will be on the same page, with one goal: keeping patients healthy, keeping them out of the hospital (if at all possible) and making sure that hospital stays are as well co-ordinated and efficient as possible.
    Will this happen all at once in 2014?
    Can we “break the curve” of health care inflation, and even reduce the cost of care as a %age of GDP? Yes–even though our population is aging. Other countries have done it. (Sweden, Japan)

  5. In all seriousness we should not try to make a “break the curve” comparison between the U.S. and other countries. There are no comparisons relative to population / cultural demographics that could result in any meaningful or understandable conclusions. Even to try is nonsensical.

  6. Henry–

    I’m not sure why you believe that the U.S. can’t be compared to other countries.

    If they are able to provide high quality care for far less, then there is no reason that we can’t too.

    I realize that some will say that our “demographics” are different. (What they mean is that a larger percentage of our population is non-white.) But even when you only compare white Americans to white citizens of other countries, you find that we spend more and our outcomes are not as good.

    Yes, obesity is a bigger problem here, but cigarette smoking is a much larger problem in France. Yet when it comes to lung cancer, they do better than we do.

    Rates of alchoholism are also much higher in some
    European countries.

    The big difference between the U.S. and other countiries is that we tolerate much higher rates of poverty. That, along with the high cost of care, and lack of insurance, goes a long way toward explaining the poor health of our population.

  7. Good discussion, here are several comments:

    1. It is hard to say that one country ‘does better’ at treating cancer unless you look at death rates. My limited knowledge that a person in the USA who is diagnosed with cancer lives several years longer, on average , than anywhere in Europe.

    Those extra years cost billions. I do not have the wisdom to say if the spending is worth it. But I can say that that extra spending might make us ‘look worse.’

    Also, the sheer price of cancer drugs in the US, with all of our vicious price-gouging, might make us ‘look worse.’

    2. One pet peeve of mine, not a major issue…..that the ACA takes credit for ‘removing lifetime limits on insurance contracts.’

    I have administered health insurance plans. The cases that test lifetime limits always involve tremendous price gouging by hospitals. When a child needs three open heart surgeries, the solution is not to raise that child’s insurance limits to $2 million. The solution to cap the price of surgery at $40,000, so the child could three or even six surgeries and still stay within modest insurance limits.

    Many Hospitals rely on million dollar claims to balance their budget. It is a very unstable system and drives up insurance rates.

  8. People who do not have a computer access and are uninsured need to have this info. What do we have in place to help them navigate this new health care reform mandate?

    • Marie–

      Good point. The Exchanges will provide information and help for people who don’t have computer access–answering
      questions by phone, and distributing printed information.

  9. Obama and Democrats said all Americans would have choice. However, if an individual, couple or family is found eligible for expanded Medicaid, they will not have a choice b/c the exchange is not allowed to sell this income-segment of the population a subsidized plan. Maybe Obama and Co. meant that these folks would have a choice between Medicaid or the tax penalty.

    This is blatant discrimination. Period. And those who use Medicaid benefits at ages 55 through 64 will be subject to the federally-required estate recovery program. Under this requirement, states are required to recover assets of a deceased person who used RX and hospital benefits at the ages mentioned above BUT a state can recover assets for any and all Medicaid benefits received. The state keeps a running tally. According to several attorney-prepared documents on public health, there could also be interest and fees.

    Estate recovery disregards wills and homestead acts. Heirs are chopped liver.

    This is unconscionable, particularly under a mandate to purchase health insurance or pay a tax penalty. Furthermore, one can accurately say that Obamneycare not only discriminates against low-income citizens, it also exploits them.

    He said mandated health insurance. Unfortunately, millions will be getting a mandated collateral loan.

    This was a big issue in Massachusetts, the laboratory of health “care” reform, and after much public outcry, two years into the MA plan, powerplayers tried to cover this over by adding text to the MassHealth application which was used for the state’s subsidized plans. The additional text was a red alert and would require that MA residents keep on the alert for changes to policy which most do not have the time to do or wouldn’t know where to begin.

    I see by your article and responses to comments that you are an ardent fan of Obamneycare and have even gone so far as to suggest that people could give up cable for an insurance plan. People in low-income brackets can’t afford to go to the movies and buy concert tickets so perhaps basic cable or cable with one extended tier is their entertainment. Do you think these folks should live under a rock?

    Obamneycare is going to harm millions just from the standpoint that it is regressively based on prior year income and also contains paybacks if income during the current year is $1 over the former year FPL. How do you think people with low incomes are going to be able to pay upwards of $695 to $2,500 back to the IRS not to mention a higher premium b/c their income increased slightly – even if by $500 – which will not cover the costs they just incurred. And if their current year income is $1 over 400 percent FPL – maybe mid-year they found a job with bennies – they will have to pay back the entire subsidy.

    Oppressive. Keeps people from becoming the best they can be. Kills incentive even for those who want or need an extra part time job to make ends meet or to save for a vacation or education.

    By all accounts, Obamneycare is involuntary servitude and will harm the very people it purports to help.

    Perhaps a small number of Americans will be helped but how many is it OK to exploit in order to benefit a few?

    (for the record: I am not a Republican or a Democrat so my comment is not political.)

  10. I used to help write federal healthcare policy for the congressional physicians on the U.S. Senate HELP Committee.
    As someone who actually saw the Affordable Care Act being drafted in Congress, even I know that there is a way to opt-out of the law without being penalized. You can find the actual language of the opt-out option in Section 1555 of PL 111-148 (formerly known as the Affordable Care Act). The language in this section clearly states that individuals and companies can opt-out of the law without being penalized.

  11. I guess I’m very confused, but the IRS just released a cost estimate for a family of 5 under the minimum “bronze” plan and they estimated the yearly cost to be $20,000!!

    In their example, they assumed the family (2 parents and 3 children) were making $120,000 per year and would thus owe a penalty of $200/month ($2,400 a year) in 2016 should the family forgo health insurance.

    That said, I’m confused as to why they would owe a penalty at all? I thought the law stated that an affordable policy would cost no more than 8% of adjusted gross income and under the IRS’ own example, shouldn’t any policy premium in excess of $9,600 per year (8% x $120,000) therefore exclude them from a penalty should they decide to forgo the insurance?

    I’m currently self employed and my wife and I make close to the example illustrated above, yet we would not qualify for any insurance subsidies and most certainly cannot afford a $20k policy!!!

    What am I missing here? This sounds disastrous to me!

    • Rick–

      First, you should know that in 2012 the average family plan cost $15,745. And in 2012 the average plan did not
      include free preventive care. (Under the ACA, all family plans will provide preventive care without co-pays and the
      deductible will not apply).

      $20,000 seems, to me high for what a plan will cost in 2016– increases in the cost of health care have been slowing. Still, 2016 is 4 years later and if premiums increased just 3% a year (much less than in the past when they have jumped 8% a year) that would take us to roughly $17,745. ($15,745 plus about $2000)

      Keep in mind that this is an average, and it includes both the employee’s share of the premium and the employers’ share.
      If you live in a part of the country where health care is less expensive (say, Davenport Iowa rather than Manhattan, of Los Angeles) the premium would be less. If you work for a large corporation that self-insures and pays an insurance company only to administer the plan, the total premium might well be less.

      On the 8% of your income rule: The rule says that if YOUR SHARE of the premium exceeds 8% of your income, you owe a penalty. In 2012, when the total premium for a family plan cost $15,745 the typical emmployee paid about $4300 of the premium. His employer paid the rest. So if, in 2016, a plan cost, say $18,000 the average employee might contribute
      $4500 (I’m assuming his share of the premium goes up 3% a year for 4 years).

      If you earn $120,000, $4500 is less than 8% of your income. If you don’t sign up for your employer’s plan, you would hace to pay the penalty.

      But what if you don’t have an employer who offers health benefits? Under the Affordable Care Act, if your employer doesn’t offer “affordable, comprehensive insurance,” you may well qualify for a generous government subsidy that helps you pay the premium. A middle class family with 2 or 3 children might wind up paying about $5500 for a family plan, with the government paying the rest.

      But for a family of 4 to be eligible for a subsidy you must earn less than 400% of the federal poverty level–today that would be $92,000. In 2016, the number would be somewhat higher.

      Median family income is about $65,000– half of all families earn less than %65,000; half earn more.

      So a family earning over $92,000– let’s say a famimly earning $100,000– is Not middle-class. They’re in the top 10% and earn more than 90% of all other American families. That’s why the government isn’t asking taxpayers to subsidize their insurane.

      What we don’t know is how high premiums will be in the Exchanges where familes buy their own insurance. Much depends on where you live. Health care costs are 20% lower in some parts of the country than in others. The age of the head of household
      also matters. If the father is in his fifties, insurers can charge 3 times as much as they would if the head of the
      household were 35 or even 40.

      So a young family living in the midwest would wind up paying much less than a 55-year-old’s family living in NYC.

      The ACA defines “affordable insurance” as an individual plan that costs no more than 9.6% of income. It doesn’t specify what’s affordable as a family plan.

      Finally, the good news is that a family buying its own insurance in the Exchange will wind up with very good insurance:
      all “essential benefits” will be covered, total out of pocket expenses will be capped (even if the whole family is in an auto accident and two of them spend a month in the hospital, they won’t have to sell their house to pay the bills. No more medical bankrupticies.) INsurers also won’t be able to cap how much they will pay out in a given year–or over the course of a lifetime. If your child has cancer and undergoes six years of treatment, the insurer can’t say–sorry, you’ve reached your life-time limit–no more reimbursemnets. And insurers cannot charge you more if you suffer from a pre-existing

      Still $18,000 would be a lot for a family earning $100,000 to pay for heatlh care. This is why we have to bring down the underlying cost of care. Reserachers say that up to 1/3 of our health care dollars are now wasted on over-priced drugs and devices, unnecessary tests and procedures (including surgries that provide no benefit) and unnecessay hospitalizations.
      If we could squeeze even half of that waste out of the system, insurance premiums could be significantly lower.

      • Replying to your comment that if a couple is in a car accident and spends a month in the hospital they won’t be wiped out due to Obamacare. That was missleading, in that case their auto insurance would provide coverage as is the case for all accidents near or in your automobile.

        • Colleen–

          Car insurance may pay initial bills. But “Car insurance policies must pay medical bills only up to the limits of coverage. The Pennsylvania State Minimum Medical Coverage is $5,000. There are no deductibles, co-pays or limits on what providers can provide treatment.
          When car insurance medical payment limits are reached, public or private health insurance must begin to pay medical bills.”

          If you’re in a hospital for a month, trust me the bill will be more than $5,000

          Under Obamacare, health insurers cannot put a cap on how much they pay out–either over the course of a year, or a lifetime.

  12. My confusion regards “unaffordable employer sponsored plans”. My husband’s company does offer healthcare, but to cover our family of 3 it is in excess of $720 a month. This is well over 8% of my husband’s approximate 46K annual income – in fact, it rounds to 19%. But it *is* offered. I am not sure if we qualify for subsidies because of that. (No, they don’t have a cheaper plan.) Where does that leave us?

    • Carrie– an “affordable” plan is defined as a plan that costs no more than 9.5% of an employee’s income.
      But very recently, the IRS ruled that this refers to the cost of covering the employee- only – not the cost of covering dependents. The insurance will still be considered “affordable” even if it costs more than 9.5% for a family pla

      If, at your husband’s company, the cost of ccovering him would cost more than 9.5% of his income then you family can buy insurance in an Exchange, and be eligible for a subisdy. (To estimate the cost of covering him under a family plan, check what an individual plan would cost at your husband’s company. If it costs more than 9.5% of his income you can go to an Exchange.

      But if individual insurance costs (or the cost of covering jusst your husband under a family plan) costs less than 9.5% of his income you can’t do that.

      One solution: if you also work, you might get coverage through your emplyoyer while your husband gets coverage through his employer. Whoever has better insurance should put the children on a family plan with their employer.

      Alternatively if your husband belongs to a union, he might find better family coverage under a union plan.

      It’s possible that a court will over-rule the IRS interpretation of the law– we’ll have to wait and see.

      Finally, there is a good possiblity that the Federal govt will decide to expand SCHIP–gov’t health insurance for low-income children– and if so your children might well qualify. Then you and your husband could each buy individual insurance through your repective employers, and sign the children up for SCHIP.

  13. In reply to Carrie – sounds simple, right!?

    What a joke. This whole thing is a giant scam and undermines my individual freedom to choose what policy I wish to buy. My premiums keep going up each time a new portion of the law gets implemented, so I ask, where’s the $2500 annual savings the President promised!! I won’t hold my breath…

    I proudly earn just enough which puts my family over the threshold for a subsidy so I will especially get hosed by the inappropriately named Affordable Care Act…The average person has no idea what they’re in store for….

  14. OK so I opt out and decide to just pay the penalty. I become sick and go to the emergency room. Who pays the emergency room bill? Who pays for my ongoing care, if I need ongoing care?

    • Carl–

      Not all of the details have been worked out, but there is talk of setting up enrollments periods when people who
      deicided to opt out can change their minds and sign up for insurance. If that happens you would have to wait until the
      next enrollment period (in 3 monhts? in 4 months) before you could sign up for insurance. In the meantime you would have to pay your own medical bills, including the ER bill0
      Alternatively,HHS could decided to charge you more for insurance if you don’t sign up initially.
      Btw, if you went to an ER, the ER would be required, by law, only to “stablize” you. This is defined is
      putting you back together so that you could walk out of the ER under your own power. If the ER couldn’t do that,
      it would admit you, but again, the hospital would only be required to stabilize you. If you needed an expensive
      operation, you wouldn’t get it unless you could pay for it, or make a downpayment on a credit card.
      Sugeons don’t take IOUs.
      Many people don’t realie that ERs can and do turn people away if they are able to walk. In Money-Driven-Medicine
      I write about a man who was mugged, and his jaw shattered. He went to 3 ERs by the time he found one that woudl take him. (He was able to walk, but by the time he got to the 3rd ER he would barely talk & was drolling blood. The doctor at the 3rd ER realized that his jaw could become infected (which lead to a fatal infection) and that if he had to wait until the next day to see a doctor, probably his jaw would have to be re-broken. The ER doc then called in a favor from a friend / surgeon who agreed to treat him.a surgeon to treat him.
      By the way, the patient was a U.S. citizen and had proof. Just no credit card.
      So if someone decides to “opt out” they are taking a serious risk.

  15. Can someone, ANYONE please help. I am a part time paramedic. My employer has limited me to the 30 hour a week to avoid having to give me benefits. BUT I already have health insurance through my spouse. Is there not a way to “waive” this from my employer and work 30+ hours with out taking benefits and not having to pay all the fines?

    • Trish–

      Your husband’s employer may or may not be willing to continue to offer you insurance. He is not required to do this, and increasingly, employers resent paying for another employers’ workers. If your employer values you and want to keep you, it is his reponsiblity to offer you benefits–it’s not the responsbility of your husband’s employer.

      If your husband’s employer decides to continue to cover you that would be great.

      But, No there is no waiver for your employer because he has managed to fob off the cost of your insurance onto another employer.

      If you’re a paramedic, I’m guessing you work for a hospital or an ambulance company. It is incredible that any company in the health care sector would try to avoid prividing health insurance for its employees. (They hope to make more money as a result of universal coverage–they will have more paying customers. But they don’t want to take part in paying for it??/)

      You might want to talk to other paramedics in your areas about this, and contact your local newspaper or televison stations.
      This is a story that many would find interesting.

      Io other industries (particularly chain restaurants) when employers have threatened cutting employees back to part-time in order to try to avoid insuring them, customers have threatened to boycott and the employers have backed down.

      Also, if you and other paramedics in your situation threaten to quit because they are being cut back to part-time, your employers may well reconsider. (I would urge you to begin looking for another job. You may well find that others who employ paramedics offer health benefits.)

  16. My wife does not work and hasn’t had insurance coverage in years. Will she be forced to pay a penalty?

    • James–

      Yes she will. The goal of health care reform is to have everyone covered. Otherwise, when your wife becomes sick (the rest of us will wind up paying her medical bills– unless she can pay them herself. If she winds up in a hospital (most of us do at some point in our lives, often more than once) and owes, say $40,000, she might not be able to pay the bill. The hospital then charges the rest of us more, to make up for her unpaid bill.
      But the good news is, depending on how much you earn, she may be eligible for a subsidy. (Your household income determines eligiibility.)Google “affordable care act” and “subsidy calculator” to see whether you qualify.

      Finally, you shoud be glad she is getting insurance. Unless you are very, very wealthy, if she is uninsured, she risks not getting the treatment she needs. If she is diagnosed with cancer and goes to a hosptial ER they have to “stabilize” her (this may include admitting her), but they don’t have to treat her (chemo, radiation, surgery). Many people don’t realize this. But the fact is surgeons don’t take IOUs.

  17. A group has an August 1, 2013 renewal. They have a grace period to comply with the 60% of the actuarial value and the 9.5% W2 until August 1, 2014. They have employees that decline at open enrollment and do not have other coverage. Those employees are then required by PPACA to go to the exchange and get coverage effective January 1, 2014 or face a penalty. If they opt to face the penalty (I believe it is $95 the first year), and then decide they want to join the employer plan effective August 1, 2014 during open enrollment, does the IRS prorate the penalty, do they pay the $95, or do they pay nothing?

    In addition, can I assume if the employee does go to the exchange and gets the subsidy, the client is not liable to pay the $3000 fine until August 1, 2014 and not at all if the plan is compliant on august 1, 2014.

    • Lisa-

      I doubt the IRS would pro-rate the penalty.
      You owe a penalty if you are uninsured for 3 months during the year.

  18. If a person chooses not to buy insurance in 2014 and thus has to pay the penalty for doing such, can that person later on down the road without waiting for an ‘open enrollment’ period decide to buy insurance because they find out that they are sick and will need insurance?

    • Jim–

      Welcome to HealthBeat.

      No, they can’t. For individual coverage, open enrollment starts October 1, 2013. It is crucial to shop during the open enrollment period – you can’t wait until you are sick to purchase coverage. If you develop a serious illness, you’ll be on your own until the next enrollment period. See

      If you make that decision, consider the risk: if you are diagnosed with cancer, and need an operation, chances are you won’t get it unless you have the money to pay for it out of pocket. Few of us have that much money.

      Each year, Americans die because they cannot afford the surgery that might have saved their lives. Doctors feel badly about this, but most surgeons don’t take IOUs.

  19. Hilarious Maggie,

    You keep getting shut down, yet have ways to sidestep people’s points by saying there is legislation in the works to address it. Why was this thing passed so quickly? It sounds like the details are in no way hammered out, making your defense sound idiotic. Thanks for wasting my time trying to get information about if I would be penalized or not.

    • tjones–

      The Affordable Care ACt is based on work that some of the brightest people in Congress and in the health care world
      (Ted Kenndy and his excellent staff, Jay Rockefeller, Hillary Clinton, the folks on the Medicare Payment Advisory Commission) the researchers at Dartmouth, Don Berwick and others at IHI (to name just a few) have been working on for decades.

      Many people understood what needed to be in the legislation. They had thought it through. Both the indvidual mandate and
      the penalty are essential.
      That doesn’t mean that there are not things willd need to be tweaked when we put it into practice. Social Secrurity continues to be a work in progress.
      Finally this is a blog where we try to be civil. IF that’s not your style, be prepared to have your comments deleted.

      Finally, I’m not sure why you have a problem understanding how the penalty works. That’s pretty cut & dried.

  20. Currently, i’am insured thru my work, but cannot afford to put my husband on the insurance (too expensive). What will the penalty be if only one of us in uninsured?

    I also think this mandate is not fair, I cannot afford to buy individual coverage or put my husband on my insurance (for that would obliterate my recent raise). I looked at the exchanges (I live in calif). The coverages for the price are not very good to. They have deductibles for the cheapest plan. At this point it is better to pay the penalty for my husband being un-insured. It is cheaper than paying for insurance whether it be thru the exchanges or my work. If i’am paying at least $200 a month in insurance, I expect to NOT have to pay a deductible on top of the premium i am paying!

    • Gladys–

      It really doesn’t matter whether you pay a premium plus a deductible or just pay a higher premium. (If a plan has no deductible, the
      premiums is alawys higher.)

      It does matter whether your husband has insurance. If he doesn’t, and is diagnosed with cancer, the changces that an oncologist will give him chemo or operate on him are very, very slim. He will have to wait until the next open enrollment period to sign up for insurance.
      During that time, he could die.

      In addition, if he becomes very sick, hospital bills could wipe you out: you could lose your house.

      All of the plans in the Exchanges cap out of pocket spending at about $12,500 for a family. After that, the insurance pays for everythign, no matter how sick you are. This is important protection.

      It would be well worth spend your recent raise to protect your husband.

  21. my daughter and son-in-law both lost their jobs. will they still be required to have insurance, with no income?

    • Bellusi–
      No — they won’t have to pay penalties for not buying insurance. You are exempt from penalties if
      •your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income
      •your income is below the income tax filing threshold

      But the good news is that they should be eligible for help. They should check out whether they are eligible for Medicaid or for subsidies to buy their own insurance in the Exchanges. They need to e-mail or call their state exchange. (IN this post I link to information on how to contact your Exchange.) e

  22. Hello well myself i will just pass on getting any insurance
    I will take my chances without it. They cant make us buy it nor pay the tax. Id rather go to jail…Free heathcare!
    And im not alone millions like me agree obamacare is a sham and i will have no part of it..Just saying
    Have a nice day

    • Joshua–

      This is what you need to know: if you are diagnosed with cancer, or hit by a drunk driver, you will not be able to change your mind and sign up for insurance.
      You’ll have to wait for the next enrollment period which could be a year later.

      And an ER is not required, by law, to treat you– just to “stabilize you.” If you have cancer and need an operation, you probably won’t get it. Doctors don’t take IOUs.
      Hospitals require downpayments. Meanwhile, your relatives may well bankrupt themselves trying to help you.

      That’s the risk you’re taking. If you’re okay with that, it’s your choice. And btw, if you don’t buy insurance or pay the penalty, you won’t go to jail.

  23. Maggie, under the ACA, will I be allowed to keep my high-deductible (i.e. $5,000) plan while simultaneously paying the $95 (initial) penalty. In this way, I would still be covered by health insurance, even if the plan doesn’t qualify at the Bronze level. Or will the insurance companies be barred from continuing to offer such plans? Thanks!

    • Jim–

      The insurance companies will still be able to sell high-deductible plans outside of the Exchanges.

      And you can buy one while paying the $95 penalty. (Though in 2015, the penalty will go up to $325, and in
      2016 it climb to $695. After that it will rise with the cost-of-living.)

      Before you renew your High-deductible plan I would urge you to take a very close look at it to see what it does and doesn’t cover.

      Plans sold inside the Exchanges will have to cover all “essential benefits”. Plans sold outside the
      Exchanges will remain unregulated.

      Some of these plans don’t cover things like chemotherapy, rehabilitation after surgery or an accident,
      etc. etc. It’s hard to spot the holes until you need the care.

      Also, make sure there is a cap on out-of-pocket spending. In the Exchanges all plans will limit
      deductibles and co-pays to around $6,000 maximum (for an individual, a little over $12,000 for a family. After that, the insurer must pay the full bill for all essential care.
      If you were hit by a drunk driver and landed in a hospital for
      a few weeks, undergoing two three surgeries, you could wind up with tens of thousands of dollars in medical bills–unless your out of pocket spending is capped.

      Even if you earn too much to qualify for a subsidy, you may be better off buying a plan in the Exchange because, by and large, they will offer much better protection.

  24. I have an adult dependent I claim as a qualifying dependent. He has no income of his own. Is he exempt or do am I responsible for his insurance since I claim him as a dependent. Nothing is clear about this stuff. Also, some of your glib comments to others about it being ‘only’ 200 dollars or only 12500 dollars out of pocket and using a recent raise to pay for it show how out of touch you are. My most recent raise was A LOT less than 200 dollars monthly after taxes. Which I’m also Assuming you have to pay for these plans with after tax dollars… That is also not very clear. I won’t qualify for subsidies yet I fully support another individual so this is very concerning for me. There have to be others in my situation supporting parents, etc but no information is available. My employer offers domestic partner benefits but won’t cover parents or others even if they are qualifying dependents for tax purposes. If I can’t claim the IRS deduction for him, but must support him anyway that is also a hardship.

    • Stretched–


      I’m not sure what “glib comments” you are referring to. I haven’t had a raise for 16 years so you’re doing better than I am. (I was self-employed, writing books for much of that time, and my most recent employer froze wages shortly after I joined the organization.)

      Turning to your problem: if you live in a state where Medicaid is expanded, a dependent with no income will be eligible for Medicaid. It is free. You will not have to pay for it.

      It is possible that you live in a state that will refuse to expand Medicaid. Though when all is said and done, I suspect that only 3 states–maybe 4– will refuse to expand it. By saying “no” they are turning down a huge amount of money that Washington will send them to pay for the expansion. States, and hospitals, nursing homes etc. in the state all want and need that money. The political pressure to go ahead with the expansion will be enormous.

      But if you are unfortunate enough to live in a state that will not offer Medicaid to an adult with no income (presumably because he doesn’t have children) you still don’t have to worry about a penalty.

      People who don’t buy insurance don’t have to pay a penalty if

      their income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of their income

      Or their income is below the income tax filing threshold.

      Your dependent is exempt from the mandate that he buy insurance on both counts.

      You say that “none of this stuff is clear” but many people have explained this many times.
      I explained it on

      When you have questions about Obamacare, all you have to do is “Google.” In this case if you Googled “Maggie Mahar” and Obamacare and Penalties
      you probably would have gotten my post. An even better way to get answers to questions about reform is to Google “Affordable Care Act” and
      “Kaiser Family Foundation” and the topic (for instance “subsidies” or Exchanges or employer-based insurance or small businesses . . . )

      KFF does excellent issue briefs; they are accurate and very clear.

      And the government has done a very good job of explaining all of these things. The problem is that most Americans don’t have the time or the inclination to read the explanations of the law. It is a complicated law because it must be if it is going to cover all of the many needs of many people (some, like you and your dependent who are in unusual situations.)

  25. my husband has a job and I don’t. our 3 kids have Medicaid. if he decides to pay the penalty would the penalty be for me and him and not the kids since they are already on Medicaid, or does that mean the kids lose Medicaid and he will be penalized for them too

    • Amber–

      I’m quote sure that he would pay a penalty just for the two of you, and that the kids would stay on Medicaid. (Since rules for Medicaid and CHIP (medicaid for kids) vary by state, you should double-check with medicaid in your state.

      But by 2016 the penalties will be much larger. You really should check out what size subsidy you would qualify for if you bought insurance in your state’s Exchange. Since you don’t work, and your kids qualify for Medicaid, very likely your joint income income for a family of five is low enough to make you eligible for a very generous subsidy. Using the subsidy, you, your husband and the kids might well be able to buy very good insurance for far less than you think. Keep in mind: you would get free preventive care , and the kids would could dental care and eye care. If you want to email me at, tell me your total income, your age, your husband’s age, and exactly where you live, I might be able to look this up for you.

  26. OK…I work full time for an employer that I get insurance from, but it is a Health Reimbursement Account and I hate it because it seems doctors in my local area are not familiar with this type of plan, billing wise. I wish I could get different insurance independently, but in NY state, the premiums on the health exchange are way too much. I make between $25,000-$30,000 yearly as a single individual. Is there any government subsidy for me on the exchange plans? Also, if I were to lose my job, I most likely would not purchase insurance if not offered by a prospective employer because the premiums here are not affordable for me. Am I safe from the tax penalty, as long as my employer provides insurance? If I am without insurance, what will be the tax penalty assuming I keep a job earning about $20,000 yearly?

    • Valerie-

      First, you really should read my posts on subsidies (You just have to “Search” “subsidies” on HealthBeat.

      But let me just point out that if you make less than roughly $46,000 a year (as a single person) you are eligible for a subsidy.
      (This fact has been repeated, over and over, in newspapers, on television, and on blogs.)

      You say that the insurance premiums are in New York State are too high.
      Have you actually looked at the insurance premiums in New York State under Obamacare?

      I linked to them on the post titled “Will the Bros Buy Insurance”

      If you follow the link, you would find that in Rochester, N.Y. •In Rochester, New York, hospitals and doctors charge less than in NYC. A freelancer who brings in $28,000 will be able to buy a Freelancers plan for $236 a month. After he applies his subsidy (which is based on his income, he would owe just $812 a year, or $67 a month. If you click on $812, which is highlighted, you would find that he would have have the option of buying a Fidelis plan $270 a month. After he applies the subsidy that someone earning $28,000 would receive, this would cost him roughly $97 a month. It doesn’t matter how old he is. In New York, you pay the same amount whether you are 20 or 60.
      In return he would receive Free preventive care, (in your case that includes contraception–no co-pay, no deductible. He/she would also be covered for all essential benefits. This comprehensive coverage is as good as the coverage you would have if you worked at a large corporation with deep pockets.

      (If $67–$97 a month seems more than you can afford, ask yourself this–how much do you spend in a given month “ordering food in” or going out for pizza and beer?) Most people who earning $28,000 (in between the $25,000 and $30,000 that you say you earn) spend more than $60 a month (including tax and tip) on take-out, and inexpensive restaurants. Cook pasta at home 4 times a month, and you have covered most of your premium. Then subtract what you now spend on contraception and other preventive care.. You have probably covered the entire $97 premium.)

      Valerie, let me say that it’s a little discouraging to try to communicate the facts about Obamacare, repeatedly, and discover that people just can’t be bothered to read them.

      I’m not the only one repeating the facts: the government has done this over and over– since the bill passed three years ago. The Kaiser Family Foundation has done an excellent job of putting them out there for everyone to read, as have dozens and dozens of blogs.
      Somehow or other, people seem to prefer to listen to misinformation on Fox News–or their friends–and then complain about how bad Obamacare is and how they can’t possibly afford it. I’m sure you know how to “Google.”

      If you have questions all you have to do is Google “Obamacare” and subsidies or Obamacare and rates and New York State. You might add “Kaiser FAmily Foundation” (there work is very good) or “Maggie Mahar”


  27. Actually, I have just begun to investigate some of your other articles. It seems, I am not eligible for insurance in the health exchange if my employer offers insurance? Is that true? I was under the impression from my own employer sponsored health care company, that now individuals can “choose” a state approved plan as an option. I mean, in NY, they have Healthy Choice, which is not eligible for people who are able to get insurance from their employer….but now the Exchange programs?

    • Valerie–

      As I have explained, you cannot go to the Exchange if your employer offers “affordable comprehensive insurance.”
      Affordable means that it costs less than 9.5% of your income.
      Comprehensive means that it covers the “essential benefits” available in the Exchanges. (Most large company plans do this)

  28. The very first comment accurately characterizes my situation, as I am 55 and generally pulling in about $30,000/yr, but am doing so in a high cost area, the San Francisco Bay. The current income considerations, at least for the lower incomes, clearly are not very rational as they don’t take into account ordinary saving for retirement and unexpected-but-necessary expenses (other than health care), expenses which still must take place whether someone is making $30,000 or $1 million.

    For example, because I cobble many temporary jobs together, a car is critical for my work, as mass transit cannot replace its flexibility and last-minute-notice-point-to-point speed. This year during a storm a tree fell on my old vehicle and my auto insurance paid a replacement fee that compensated according to a typical selling cost, not buying or retail cost. After the insurance settlement, I had to still pay nearly $4000 in additional costs and incidental expenses for an equivalent vehicle. Moreover, at my current annual income in order to meet ordinary and necessary expenses, including a rational rate of retirement savings, continuing education, as well as professional insurance and license fees, I had to go homeless for the last few years, so my only housing cost is the cost of storage, about $300/mo. That is another reason a car is critical for me to keep working. When I first heard about the ACA, I thought I could handle up to $100/mo to $150/mo, but the rates seem to be rather high at $300/mo for someone making $30,000.

    I have never been ill or been hospitalized, (except for appendicitis when I was 20 yo), so how can I justify $300/mo as a “very good deal”? Being homeless, I don’t have cable or utility expenses of course, (and frankly, even when I was in a home I never watched TV that much and never bought cable in my life), but work-essential continuing ed costs, license fees, and professional liability insurance amounts to another $4000 or so per year, and although deductible,
    Federal and State taxes run about $3000 per year, so there is very little wiggle room in my budget if one rationally anticipates ordinary as well as few unexpected expenses from time to time. Without being able to save for when I am older and unable to work, I would be guaranteeing complete destitution in my later years in order to achieve transient health care security. It makes no sense the way so much financial burden is placed on lower income brackets.

    • Jin–

      If you earn $30,000 you might be eligible for a subsidy if you are self-employed.
      (See my post on Modified Adjusted Gross Income.)

      I the meantime, it sounds as if your biggest problem is that you live in one of the most
      expensive areas in the country. I do, too, so I understand the financial pressure. But given your a r ge, and the fact that you are, as you put it cobbling jobs together, I wonder if your life wouldn’t be much easier if you moved to a less expensive place?

      Obamacare is not intended to make sure that we can all live where we would most like to live– covering our transportation costs, etc.

      It just aims to make sure that we can all afford health insurance. Healthcare reform cannot solve the other problems in our lives– for instance, your need for a car (though I thought SF has pretty good public transportation) and your admirable desire to save for retirement (though, like all of us, you will have SS, and if your health holds will be able to work at lest part-time. . )

      What I am trying to say is that healthcare reform is about trying to make healthcare affordable. There are other programs that we need to help people earning less than median income– better Food Stamps (SNAP), more low-income housing, high-quality, low-cost child care, etc. But health care reform cannot solve all of those problems.



  29. Maggie, an elderly person asked me, “Who is paying for the subsidies?” I was wondering, too, how much Federal dollars are the states getting, who have the Federal Government run their exchanges? If the states are running their own exchanges, are the states paying the subsidies?

    • Allen–

      The subsidies are paid for by two groups. First, health care industries that will benefit by getting so many new customers: drug-makers, device makers, insurers.
      Secondly, individuals who earn over $200,000 a year ($250,000 for families) are paying higher taxes that help fund the subsidies. (Though their contribution is much lower than
      the health care industry’s contribution. )

  30. I have full coverage insurance through my husband’s Tricare military insurance. I am being held to under 28 hours per week by my employer (who would prefer for me to work full-time) so that they don’t have to offer me benefits. Why can’t I waive this right? Or why can’t they be permitted to not offer me this benefit? Why don’t I see other military spouse’s complaining about this?

    • Nicole–

      What right do you want to waive– your right to have full insurance coverage through Tricare?

      Why would you want to do that??

      I’m afraid I don’t understand. Please clarify

      • I’d like to be able to sign SOMETHING for my employer so that they can offer me full time hours without having to provide me with health care benefits. They are holding everyone to part-time hours to avoid offering us health care benefits. At least that is my understanding of it. I would never want to waive my right to my Tricare benefits.

        • Nicole–

          If you are covered by a government program (which TRICARE is) your employer is not required to give you health insurance.

  31. I will turn 58 in November (female) . I have no health issues. I take no medications. My hours were cut at work to avoid providing us (23 of us) with insurance, I earn only 20K per year. I have no dependent children. How much will have to pay for insurance? I can’t seem to get this answer. Are the penalties less than the premiums? How does anyone expect me to pay now with less income for what I could not pay for with more income?

    • Michele–

      Whoever told you that your employer was cutting hours because of Obamacare lied to you.

      Under the law, only employers with more than 50 employees are required to offer healthcare.

      Secondly, since you earn only $20,000 you will be eligible for a generous subsidy that will help you
      buy insurance.

      You can find out about the prices and subsidies simply by calling your state Exchange. But you probably should wait a week or two because right now the phone
      lines are tied up.

      Finally, it’s great that you don’t have health issues now. But you’re 58. Very, very few people remain healthy their entire lives and then die peacefully in their
      sleep. You would be very foolish not to buy insurance.

  32. Why pay the penalty when the IRS is limited to a collection ability? Under § 1501(g)(2) of the ACA, the agency is precluded from using its traditional means of collecting fines and back-taxes.

    • Billy-

      Most people will pay the penalty because they are basically honest.

      They may also be a little afraid of crossing the IRS.

      (The IRS won’t put you in jail if you don’t pay the penalty, and they won’t
      garnish your salary. But would their computers be more likely to select you for an audit?)

      I don’t know. But the same people who don’t pay the penalty are also probably people who
      really don’t want to be audited.

  33. If I refuse to sign up for health care under the ACA, what
    happens if I need emergency room care some time in the
    future? Who pays for my treatment?

    • Fred First-

      No one pays for your treatment. If you have any money at all, you will have to pay the ER bill yourself.
      If you are hospitalized it could turn out to be a very very large bill. (This is how people who don’t have insurance–or have
      skimpy insurance–wind up selling their homes to cover the costs of healthcare.

      If you have no money and no assets, the ER still has to “stabilize” you. Under the law that simply means that they have to patch you up so that you are able to walk out the door. (That may mean walk out the door on crutches.)

      If you have cancer, they are not required to operate on you. They will give you pain medication.

      Eventually, if you are dying, they will admit you to the hospital.

      Bottom line: if you refuse to sign up for healthcare, you are taking a huge risk.

  34. I’m 62, live in Florida, and my 2012 net income (combined with my husband’s) was 44K. As a result, the exact same health insurance policy I carried privately will cost me $200 more per month (from $470 to $670), a price I can’t afford. I have been unemployed since September 2013.

    There is nowhere to go to discuss with ACA the fact that our finances changed in 2013, and that the income cap is a bit too low. So I’ll pay the tax, but be without health coverage in 2014 and 2015, until my tax return shows my income is below the cap, or if I can find a full time job with health insurance benefits.

    • Me Again–

      First, you are eligible for a subsidy now, and applying the subsidy your insurance will Not cost $670 for two people. A couple earning under $62,040 qualifies for a subsidy.

      You DO NOT have to wait until your tax return shows that your income is below the cap.All you have to do is call your Exchange to enroll, and when you do that give them an estimate of your 2014 income.
      Secondly, there are many places where you can get help enrolling and explaining your situation.

      Just Go go, and type in your city and state, OR your zip code and you will get a list of places and phone numbers. (I tried this for “Miami Beach, Florida” and it works.

      The cost of your insurance (including subsidy) will be based on what you estimate your 2014 income will be.
      If you get a job during 2014, you can call them and raise your estimate of your income. They will then adjust your subsidy based on that new estimate.

      When you file your 2014 taxes in April 2015, if it turns out that you underestimated your income at any point, you will have to pay back part of the subsidy. If you overestimated your income, the government will owe you money.

      Finally– even if you still earned 44,000 joint, you would qualify for a subsidy

  35. We are a family of 2, my husband is 65 and I am 62. We are both on Social Security (not disability). Our combined income is less than 200% of the FPL, therefore we have a subsidy and the premium is the same for 2 people as it is for just me. My husband, being 65, has Medicare for which he pays a monthly premium. The subsidy and premium I pay is for a family of 2 and is 6.145% of our family income based on the FPL of less than 200%. When you add my husband’s premium to mine, we pay greater than 10% of our low income on health care premiums. If he were 64, we would both covered at the same premium that I pay – it is a family premium, not individual. This seems discriminatory to me that we have to pay greater than 10% of our income on health care premiums and a family who is a year younger pays only 6.145%. The media calls this the “family glitch.” Are you aware of this problem, and is there any plan to assist families like mine or others whose have a spouse who pays a premium for employer health coverage and they also pay the family premium for just the one spouse – combined premiums are unaffordable.

    • Kathleen–

      I know that Democrats are very concerned about the “family glitch” but I think it would take legislation to do anything about it. And Republicans are not going to vote for anything that
      would improve Obamacare–or that Democrats want.

      So, for the time being (until there are more Democrats in Congress) I’m afraid I don’t see a fix. (It’s possible that the administration could do something without going through Congress, but I very much doubt it.)

      Just one question: are you by any chance self-employed?

      If you are, you can deduct both the premium you pay and your husband’s contribution to Medicare on your income tax.

  36. Thank you so much for the reply. It is interesting that whoever set up the system for the subsidies and the percentage that families should pay, only set it up for the whole family. No consideration was given for the many situations where only part of the family would get insured through the exchange and other family members pay also through employment or our case Medicare. It is especially hard for people in our age bracket who have a low and fixed income and end up paying more for health care premiums.

    My husband is self-employed and works very little for a number of reasons. I am fully unemployed due to an automobile accident (other person’s fault) and the girl who hit me had little insurance. I had no choice but to take early retirement benefits in order to survive. We will look into any deductions on our income tax, thank you for that. Love that you are answering these questions for all of us!

  37. Hi,
    Should I use 2013 earning to calculate if my insurance will be more then 8% of my annual income? or how would I know if i’m in the percentage that does not need to buy insurance because of that 8%?

    For instance in 2013 I’ve accumulated 2 months employment (no insurance), 3 month receiving unemployment benefits and 7 months working as a contractor – if I add my year earnings my payment for the cheapest insurance in the bronze level will most likely be over 8% of my annual income – if it is, then am i exempt?

    would very much appreciate a reply



    • Gabriela-

      You will be exempt only if the you can’t find insurance that costs less than 8% of your 2014 household income--after applying a subsidy. (I’m guessing you would be eligible for a subsidy– the vast majority of people who don’t have health benefits do qualify for subsidies.
      When you apply for insurance you are expected to estimate what your 2014 income will be. When you file your 2014 taxes in the spring of 2015, the government will see what you actually earned in 2014. If you overestimated your income, the government will adjust your subsidy upward, and send you a check. If you underestimated, you will owe the government money.
      Some good news: because you are self-employed, you can deduct at least part of what you spend on insurance on your income taxes. Finally, in general, paying the penalty and not buying insurance means taking an enormous risk. Any one of us can be hit by a car, or suddenly diagnosed with a serious disease. If that happens, and you’re not insured, you won’t get the care you n need. (An ER is only required to patch you up so that you can walk out the door–on crutches, or with a prescription for painkillers. Unless you can pay (or have insurance) hospitals are not required to provide surgery (even if you will die without it) and they don’t. Surgeons don’t take IOUs.

      And if you suddenly get sick, you can’t sign up for insurance then. You’ll have to wait until the next enrollment period rolls around in the fall of 2014.

      At best, your family will wind up owing tens of thousands in doctors’ bills. This is how people go bankrupt and lose their homes.

      • Thanks for the very quick response 🙂 – I actually used the compare tool in the Covered California website with what I used to earn when I was fully employed and I did not qualify for a subsidy and my insurance payments were $24 dollars over my 8% – which I’m guessing is not enough to risk the penalty for not having Insurance… Thanks again!

  38. I am hoping you can help me. I have looked through some of the other comments and can’t seem to find a similar situation, which is odd.
    Anyway, I am being told through that I don’t qualify for a subsidy for healthcare. I believe the reason is that my wife has coverage through her job. However, to add me to her coverage would cost a total of $887 a month. Her employer is very generous and pays $400 a month for her. Our combined income for our family of 4 is $66,500, which would make my share $487 a month, well beyond anything we can afford. Even the low end plans at the “exchange” would be about $250 a month for me, still not even close to affordable (a car payment would be less expensive). Is there anything I can do to find some assistance?

    • Eric K

      If your wife has to pay only $400 a month for insurance at work (which I assume covers her and your two children, you are very, very lucky. If you joined the plan, the cost would be $887 a month or $9,040. Again you are lucky. Not “very, very,” but keep in mind that the national average for policy covering a family of four pre-Obamacare is about $12,000 to $13,000.

      You are not eligible to buy insurance in the Exchange because your wife’s employer is willing to insure both of you. (This is why you can’t get an Exchange subsidy-as a society we can’t afford to subsidize people if an employer is willing to subsidize them. (Note: your $487 probably won’t cover the full cost of your coverage.)

      If the amount that you would be paying for one adult (not a family plan) exceeded 9.5% of your income it would be considered unaffordable, and you could go to the Exchange. But $400 a month does not exceed 9.5% of your family (joint household) income. If the insurance her employer offers covers less than 60% of medical expenses, it would be considered too little protection, and you could
      go to Exchange. But from what you indicate, it covers more than 60% of medical expenses (unless the deductible and co-pays are extremely high.)

      So I would urge you to take her employer up on his offer.

      Ideally, under the ACA your employer also will begin offering insurance and you can go on his plan. (Though keep in mind your share of the premium would probably be at least $200 a month.) I have a sense that you don’t realize how much health care costs. In this country doctors, hospitals, drugs, & devices all are extraordinarily expensive. Under Obamacare, I am paying $600 a month just to insure myself.

      You may have been lucky in the past and didn’t need much care, but with two children, you want to be sure that you are protecting the whole family.

      Finally, in a few years, the ACA is likely to open the Exchanges to people who work for large companies that offer insurance–and their families. At that point, if your income is still in the mid to high sixties, you will qualify for a subsidy.

      But right now, the ACA is trying to take care of the millions who have no health insurance at work, and are either totally uninsured–or under-insured— covered by a skimpy policy that won’t be of much help if someone in the family becomes ill.

      • Eric K–

        I should add that many people would like to see the law changed so that if the premium for the family plan your wife’s employer is offering exceeds 9.5% of income, you could go to the Exchange. (Right now you can go to the Exchange only if the premium for individual (not family) coverage exceeds 9.8% of your income.

        I would very much like to see the law changed. But given the current gridlock in Congress, I don’t see Republicans voting for anything that would make Obamacare better. (Eventually, my guess is that the change will be made, but that doesn’t help you in the immediate future.

        Conceivably, the president and HHS could make that change to the ACA by issuing a new regulation–but I think it would have to go to a vote in Congress.

        • Thanks, but no. The $887 is just for us, our kids are on Illinois AllKids. Not to worry, or kids are covered and have been, even though AllKids is pretty bad. (I don’t even want to get into that) For all of us it would cost $1260 a month. My portion, spouse only, would be $487 per month, not at all “affordable”. (That’s 2 car payments) And, believe me I know all too well how expensive healthcare can be. I am currently talking with a lawyer about bankruptcy just so I can afford the $250 a month at the exchange, not even considering $487
          (Just for fun, it is too late to get on my wife’s insurance anyway, open enrollment at her work ended Dec 31.)
          Basically my options are: bankruptcy to free up the money or pay the fine ($400 a year if its just me??). That’s kind of a no-brainer.
          So, wow I’m really starting to understand why people hate this thing.
          Thank you very much for your input.

          • Eric K-

            The numbers in your story don’t add up. If you have income of $66,000, then how are your children on Illinois Allkids?

            Obamacare is not forcing people into bankruptcy.

            Either you are terribly confused (and need help from your Exchange) or your email is simply disinformation designed to scare and discourage others.

  39. So, let’s back up a tick. I want to thank you for your input, as you have helped a lot of people and was hoping you could help me. You are right, my math was off by about $17. Wife: $417.74, wife plus me= $887.42, full family of 4= $1260.12. So you are correct, my share would only be $469.68 per month, (not the $487 I stated earlier) my wife does have to pay $17 per month. Again, very generous boss who pays $400 per month.
    The cut off for a family of 4 for Illinois Allkids is $6320 per month. Our monthly income is roughly $5208, or if you divide the total yearly ($66,500) by 12= 5541.67. Well within the parameters. Feel free to check here:
    Looking at my bank statements (randomly) from last July and last Oct: deposits of July: $4263.51, expenses (and we don’t have any extra curricular anything, we can’t even rent movies most of the time) $4244.19 leaving us at the end of the month with a grand total of $19.32. Oct in: $4486.86 out 4444.52, (mortgage, bills, electric, water food only, nothing frivolous at all) this was a good month and left us with $42.34. We were able to order a pizza that month if I remember correctly. Chicago is a very expensive place to live.
    You are correct, Obamacare isn’t forcing me into bankruptcy. However since you brought it up, it is falling WELL short of its goal, and forcing me to take on an insanely large monthly payment that I just can’t afford. Its great that you can afford your $600 payment, I wish I had your job. I have no intention of misleading anyone, I am simply trying to get a straight answer. I voted for the President twice, based on the promise of help with health insurance.
    And, yes, I am very confused by the answers I am getting. The information I am receiving is very confusing and disappointing, from everyone, not just you. This is a program supposedly designed to help people. Yet, it is not providing the assistance it promised to me and my family.
    I would like to point out that your derogatory tone in the last reply is very disturbing.
    Thank you again for your help, but I will seeking further assistance elsewhere.

    • I forgot to point out that you never really answered my original question of: is there anything I can do to find some assistance?

    • Eric-

      Median family income in Chicago is $71,674 You earn somewhat below median, but still earn more than 40% of all families in Chicago. You also are lucky enough to have a govt program that provides health care for your kids, and an employer who provides generous healthcare for your wife. (Sorry that I questioned how your kids qualified for the program; in many states a family has to be “low-income” to qualify.)

      You blame Obama that you would have to pay $470 a month for your insurance. I don’t know your age, but let’s say you are in your early 40s. I wouldn’t expect a 40-something to find comprehensive insurance for less than $400 a month.
      $470 a month is not an “insanely large” amount for an adult to spend on health insurance.

      You are right: the fact that your wife has insurance at work creates an awkward situation. If she didn’t, the whole family could go into the Exchange and qualify for a subsidy. The fact that have 2 children, live in an expensive city, don’t have health insurance at work and earn slightly below median income for your location puts you in a tight spot.

      This does not mean that Obamacare is “falling Well short of its goal.” It is helping millions. You seem to think that if it isn’t helping you in your particular situation it is a failure.

      Under Obamacare many of your neighbors are better off–and keep in mind that you are no worse off that you were pre-Obamacare.

      Pre-Obamacare, I take it that you had no health insurance. That means if you were in an accident or became sick, you and your family would be at great risk. If you were hospitalized and needed surgery, the bills might well cause you to lose your home. With only one income your family would be hard-pressed . . . .

      Under Obamacare you could eliminate that risk for $470 a month. I understand why, given your income and the cost-of-living in Chicago,that would put you on a very tight budget. Living in NYC where I raised two kids as a single Mom, and worked free-lance much of the time, I’ve been on a tight budget for a good part of my life. So I sympathize, but would suggest that rather than blaming Obama, you need to be creative.

      1) Could you find a job that would give you health benefits?
      2) You mention car payments. My second husband never takes out car loans. Throughout his life he has bought 25-year-old BMW-s most recently for $2500, put in another $2500 having a mechanic fix
      it up and had a car that he drove for 10 years with no car payments and low insurance payments (because it wasn’t worth that much.) He parked it on the street –for free–and it was never stolen. (No one could get the parts for a 25-year-old car made in Germany.) Could you replace your car (and car loan(s) with a cheap used car?

      3) $4,444.52 a month in basic living costs suggests that your mortgage is at least $2,000 a month. That’s large percentage of your income–larger than a financial advisr would suggest. This, of course, is your decision. But if you choose to spend that large a percentage of your income on a house that may be what puts you in such a tight spot. Again, not Obama’s fault.

      Finally, no I can’t think of any place for you find assistance. You earn too much to qualify for Medicaid. You already have found social assistance for your kids. Your wife’s boss provides her with assistance. Now you need to figure out how to pay for your own health insurance. These days, a great many people with children in your below median income bracket find they have to take a 2nd part-time job. Maybe one day on the week-end. $100 a day X 4 = $400 a month– close to covering your premium.

      Whatever you do, don’t go without insurance. The risk is too great. For your family, the consequences could be catastrophi

      • Wow! I guess if we all just followed your economic plan, we can finally get our financial houses in order. I currently live in the Northwest, but I recall that my rent for a very modest 3 bedroom townhome in California in 2006 was $1,650 a month. That same townhome probably now rents for $2,000 or more a month. Hardly a king’s ransom. As for vehicles, sometimes older vehicles cost more to keep running than the safety and reliability of a newer (not necessarily brand new) vehicle.

        • Marie-Everyone has a right to make their own financial decisions. What we don’t have a right to do is to decide
          not to buy insurance–and let hospitals “eat” the bills when we cannnot afford to pay for our care. Because when
          hospitals are forced to absorb the bad debt, this raises fees for everyone else.

    • Erik, what a well reasoned and logical response. And yes, I believe her response to you was derogatory in tone as well! All the problems, glitches and outright lies concerning the ACA harken back to when the then Speaker of the House (Nancy Pelosi) uttered those famous (or infamous) words: “We have to pass it before we know what’s in it.” Enough said.

      • Marie-

        That is not what Pelosi said. She said we have to pass it so that “you” voters know what’s in it. She was not referring to Congress. Pelosi and others who worked hard on the bill knew exactly what was in it. They assumed (wrongly) that once it was passed, many journalists would write substantive articles
        describing the bill in detail, and that readers would take the time to read those articles. Instead,
        much of the public preferred to “learn” about the ACA by listening to one-liners on FOX.

        This is an example of how most of the “outright lies” about the ACA came from opponents of the bill who couldn’t be bothered to get their fact straight.

        I have spammed the rest of your comments because they, too, contained misinformation. I don’t want HealthBeat to be used as a platform to spread lies, adding to the confusion about the bill.

  40. My sister who is unemployed, 67 years old and just applied for Social Security. She will be lucky if she gets
    400-700 month. not much. She went on to Obamacare plan to sign up. An hour and a half later, trying to get through the maze, up pops a window and tells her she is over 64 years old and not eligible. #1-why was this not on the first page #2 The ACA doesn’t apply to every American as promised…why? so she then goes to apply for medicare, only to be told since she didn’t apply when she was 65, she has to wait for 18months to be eligible, plus has to pay 126.00 a month for those 18 months.something she cannot afford.Again, why? and are there other resources she might try?

    • Patricia–

      Most people know that if they are eligible for Medicare, they cannot insurance through Obamacare. (The government already has set aside
      funds to cover their insurance.) No one ever promised that the ACA would apply to every American. If you have comprehensive health benefits at work, or are eligible for Medicare or Medicaid, you cannot get a subsidy in the Exchange. You are already subsidized by the government or your employer.

      Virtually everyone also knows that when they turn 65, they are eligible for Medicare and are supposed to sign up. If they don’t sign up
      three months before their 65th birthday–or a few months after– then they have to wait 18 months and pay a penalty. This is the law.
      (If they are already receiving Social Security, they will automatically be enrolled in Medicare. Otherwise, they have to call Medicare and sign up.

      I cannot imagine why your sister did not sign up for Medicare–it’s not hard.

      I’m afraid I don’t know of any other resources she can try.

  41. I live in MA. Elderly people are paying 30% or higher of their income for Health Insurnace. Medicare about $100. Then they have to buy supplemental insurance my friend pays about another $200 for that. Her income is $1,000 per month. She ends up with only $700 per month to live on. From their $700 they have to pay co-pays for doctors and medicine. One perscription cost her $50. They are zapping it to the elderly. Elderly people should not have to deal with any of this junk. They should get better benefits then people on Welfare, who get no cost insurance and little to no copays. People move to MA from other states just to get on our Welfare program. Shame on all the politicians. The elderly should not have to choose between food, doctors and medicine????

    • Freddy–

      It is true that Medicare has become very expensive for many seniors.

      The best way to fix this problem would be to eliminate much of the waste in Medicare: this means cutting back on the
      over-treatment: unnecessary tests, treatments and surgeries.

      Unfortunately many Medicare patients believe that “more care is better care.” When either an insurance company or Medicare refuses to pay for treatment that will expose them to more risks than benefits, they scream that their care is being “rationed.”

      Medicare will become more affordable only when we stop paying doctors and hospitals for over-treatment. See my most recent post on Longevity:

  42. I have a question that will concern everyone on or thinking about Obamacare that I can not seem to find an answer to..What happens to a person who signs up but due to living paycheck to paycheck and an emergency (not medical) happens and they are unable to pay their monthly ACA premiums for the rest of the year (or even the next 3-6 months)?? Will this person get a bill from the governement for the time they were unable to pay? Will the person loose their coverage during that time? Will their income tax refund that they may be receiving be taken because of the inablity to pay the monthly premiums?

    • Denise N

      If you stop paying your monthly premium, you lose your insurance, just as you would have pre-Obamacare.

      There is, however, one big difference– if your income falls (you lose your job or your hours are cut) you just have to let the government know and you will be eligible for a bigger subsidy. Just do a new estimate of what your income is likely to be for the year, call your Exchange, and the government will begin paying a larger share of your premium.

      But do Not stop paying your share of your premiums. If you don’t have insurance and get sick you will find that
      you will have very limited access to health care. The risk is just too great. If you have to borrow money to pay your
      insurance premiums, borrow it. (If you have a credit card, borrow on the card. Otherwise, borrow from friends or family.
      But paying your insurance premiums is like paying your rent–it’s something you really can’t skip.

  43. I have searched and searched and cannot find an answer to my question. I hope you can help.

    Currently, I am a full time hourly employee. I am a single mother of 2 and I make right around 40,000 (before taxes). My employer offers insurance to hourly employees, but this insurance does not meet the minimum required by the ACA. So, I was able to get insurance on the exchange and a subsidy. I have good insurance and it is affordable. I have a small deductible, but it does not include PCP visits. The plan I chose is roughly $224/mo and I pay $24.

    Salaried employees where I work have different insurance that does meet the ACA minimum. It is roughly $200/mo (individual only for the lowest plan) and has a deductible of $3,000 before benefits (except 1 yearly preventive well check) kick in – this includes prescription costs. **So you are basically paying $2,400 a year to get a yearly well check (which would be a heck of a lot cheaper if you just paid out of pocket for) and you just hope you don’t get sick during the year.

    My confusion is this: 9.5% of my income is $3,800 (or $316 per month). So according to the ACA formula, I can afford up to $316 a month for insurance (which I assure you that I cannot – and just so you know, I don’t pay for cable, have no car payment, etc.) However, the exchange clearly deemed my income to be low enough that it concluded that I qualified for a *roughly* $200/mo subsidy. I can obviously afford the $224 insurance premium I chose since I only pay a fraction of that. BUT If I were to become a salaried employee and be eligible for the salaried insurance (which is roughly the same cost as what was offered on the exchange) it sounds as though ACA deems this affordable and I would not get a subsidy on the exchange. Since I could not afford the $200+/mo insurance premium, I would have to go without insurance and suffer the penalty – which I also cannot afford.

    So the questions is: Am I missing something? Because this makes no sense. It sounds as though you’re better off if your employer DOESN’T offer minimum value insurance.

    • “Confused” — Any

      In your case, you are better off that you are an hourly employee.
      The insurance your employer offers is Not as good as the insurance you found on the Exchange.
      The goal of the ACA is to make sure that people who don’t have access to affordable, comprehensive insurance at work can get it on the Exchange. The subsidies are particularly generous if you have children–the architects of the ACA wanted to make sure that kids are covered. If they have good healthcare when they are young, they will be healthier adults, more productive, & able to contribute to society. This is good for all of us. And this is why your Exchange insurance is so affordable–you are a single Mom with two kids. (And I am very, very glad that the ACA makes insurance so affordable for single Moms.

      The ACA also is concerned about making sure that employers offer comprehensive insurance, and that it is “affordable” in that it does not cost more than 9.5% of your income.

      Here I would add that many people do spend 9.5% of their income on health insurance. (I do.) Whether they consider that “affordable” depends on many factors: their priorities, where they live (how expensive rent or a mortgage is), etc.
      You should know that in most of Western Europe the average household pays about 10% of income toward health care, usually in the form of taxes. (They have no choice.They can’t opt out by paying a penalty. But they do have very good benefits–without deductibles.)

      Finally, the insurance your employer offers is not as good as many plans on the Exchange because the deductible is so high. (You may have read that on the Exchanges out-of–pocket costs are very high; this just isn’t true unless you buy a Bronze plan. But conservatives have spread this myth and many journalists repeated it.)

      In the future (in three or four years, it is very likely that the government will let employees who work for large firms shop in the Exchanges — even if their boss offers comprehensive insurance that costs less than 9.5% of income. Employees with high deductibles could then switch to the Exchanges.

      But if they receive subsidies, it is likely that their employers will have to pay part of those subsidies. We’ll have to see how this plays out.

  44. I and my wife retired in 2014 with income over $63000 in and did not qualify for a subsidy. In 2015 we will be below $60,000 in income will we qualify for a subsidy

  45. I currently receive medical and my fiancee receives medicare through SSDI. we plan on getting married in September. My question is does he loose his medicare when I sign up for health coverage through covered California ? We are a family of 6 (4 adults and 2 children) our combined income for all is around 53,640.00. He currently has health issues and we just can not afford to loose his medicare.

      • Thank you for the quick response !
        I tried researching the question on the internet and I also tried to call but when I called the wait time was like two hours and then it would disconnect.
        So when I sign up through covered California do I enter his information as well even though he will not be needing insurance through their website? Also do you enter SSDI payments ?
        Thanks again

        • Worried — The Exchanges may not be up & running full-strength right now. (The next open enrollment period doesn’t start until Nov. 15)

          But if you call Medicare, they can give you a definitive answer. You can call your local Medicare office, or Medicare in D.C.

          I’m pretty sure that Medicare in D.C. will ask you to punch in your phone number and call you back the next day. Excellent customer service.

  46. I am not working atm, I am going to school. I am not married but I live with my fiance ( been together nearly 10 years) What category do I fall under? My income is zero and i am not legally married. YET.. Will i still have to file and be penalized? Confused. Please help