Can’t buy insurance? Great. Give the IRS $2,000 or go to jail?

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I really tire of Republican sound bite about what they not-so cleverly call the “non-Affordable” Care Act that our President “Rammed down our throats (why is that their favorite colorful phrase?). The average American, they say, cannot afford it. And if they do not pay, they get charged $2,000 a year for the right to not buy health insurance. Or so goes the Facebook meme

As I have come to know, facts contrary to what one believes in many cases only serve to strengthen believes in falsehood, but, I like Don Quixote, and so long as there are windmills of prideful ignorance, I will speak to them.

The $2,000 penalty

There is an up to $2,000 per employee penalty annually for a qualified business (more than 49 employees) that does not offer health insurance.

For individuals, it goes like this: The tax for not having insurance in 2015 is $695 per adult and $347.50 per child (up to $2,085 for a family), or it’s 2% of your household income above the tax return filing threshold for your filing status—whichever is greater.

But, there are exceptions, like if you did not have to file income taxes (around $10,000 single and $20,600 married), or were denied Medicaid or CHIP with an income of less than 138% of the federal poverty level, which is $16,394 (about the level of the minimum wage) for a one person household, or if coverage would cost more than 8% of Modified Adjusted Gross Income. This is basically the line on the tax return before taking personal credits and the standard or itemized deductions. 8% of that is $1,311, roughly $109 per month – about the cost of a typical cell phone and cable TV. Or less than a pack of smokes a day, or a 6-pack of Pabst Blue Ribbon every other day.

 

We are not typically buying insurance anyway

Back when I first started working, the health insurance plans all had deductibles, after which, they usually paid about 80% of the costs. Typical deductibles, in the days of $2.00 an hour minimum wage were $250 – $300 a year, and there were low annual and lifetime limits (both of which are now gone). These amounted to about 100 – 150 hours of work (before withholdings) —2.5 to 3.75 weeks of gross pay. An equivalent today would be about $1,000 (which is considered the threshold of where “high-deductible” plans start.

That was insurance.  It didn’t pretend to cover people on the first dollar; it gave assurance against catastrophic loss. What we have now is a pre-paid health plan, where we pay premiums and then get care.  If you go over the premium too often, your rates are raised.  If you are below the actual cost, the insurance does not go down, and the company wins. That’s business.

And don’t even get me started on what happened with the “pre-existing condition” clauses, which went the way of the Dodo with the ACA, with the only rule being it has to be bought during an open enrollment period or after a qualifying life event.

 

Obamacare is a rip-off

First, there is no such insurance as “Obamacare Insurance.” Our President tried to get a public option through when the ACA was passed, but it was carved up like a Christmas Turkey by  Republicans because the insurance companies were afraid that if one was offered—like making Medicare available to everyone—that they would not be able to compete. So, that was tabled, and what came out was a huge bonus to insurance companies because the plans that are offered at the marketplace are offered by insurance companies like Blue Cross, Aetna, United, and so on,and with the increased number of people buying,they reap the reward.

One common gripe I hear is that no doctor will take  Obamacare (see previous paragraph), that it’s not right to force people to buy insurance if you cannot force doctors to take it. Doctors have always been able to pick and choose which insurance they will and will not take. Had there been a public option, or better yet, had it been single-payer, this would not have been an issue.  The thanks for blocking these goes to our Republican Senators and Representatives.

Some insurance programs they take, others, they do not.  The more one pays, the more likely it is their insurance will be accepted by the doctor they choose. This is patently unfair, especially in this country. But, until we get Congress to expand Medicare to all, implement a single-payer system, that is what we have—it is what is known as letting the free  market work. The free market without government oversight has, throughout the history of the country, resulted in some rather nasty consequences, like denying people needed health care most recently; a brief review of our history will uncover many many more.

All ACA compliant plans have maximum out of pocket annual limits of about $7,000 per person or $13,700 per family; depending on the ages involved, these can go from $250 a month to over $1,000 per month per person. The typical $10,000-high deductible plans are much cheaper, some as low as $75 a month.

The most common complaint is that people can’t afford $10,000 a year. I agree that is a huge number. But, getting in an accident and spending a month in the hospital without insurance costs way more. Before the ACA, most policies had lifetime limits of $1 million.  One serious accident, and the costs can blow past that fairly quickly, the result being that even people with good insurance from a  good company ended up having to file bankruptcy.

One of the primary benefits of the ACA is to prevent bankruptcies created by medical costs.  Most families are not able to pay $500,000 or $1,000,000 for a hospital no matter how lenient the terms and have to file bankruptcy.  Of course, the costs are paid by everyone else. With a $10,000 deductible plan (which can be had for about the same costs as cable TV, cell phones, or beer), the bill, while still high, can probably be worked out without a bankruptcy. Yes, the rest of us still pay the balance of the bill, but at least everyone is paying something.

“Repeal and replace!” the Republicans scream. With what? “Something that makes sense.” I agree.  Obama settled for this, knowing it was not ideal because it was a step forward, and it was all he could get past Congress. And it has worked.  The uninsured population dropped from 20.3 percent in the third quarter of 2013 to 13.2 percent in the first quarter of this year. Health care cost growth slowed sharply: After consistently outpacing gross domestic product growth by 2 to 3 percentage points annually, health care costs rose at just about the same rate  as GDP, which amounts to a savings of more than $2,000 in 2015 for a family of four.

So, believe Obama care is evil.  But for no other reason than the avoidance of bankruptcy, it is a good thing. It used to be the mark of a conservative to pay their own way, to not take “charity.” By deciding not to buy even the cheapest of the High deductible plans, people are deciding to have others pay the cost for them.  The penalty is a way to make them pay something for the costs they are asking everyone else to pay for them.

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