Consumers without health insurance will face tax penalties next year

health insurance cost medical

Open enrollment period is coming, giving consumers a chance to purchase health insurance policies

November is coming and in the United States that means that the next open enrollment for health insurance exchanges will begin. On November 1, consumers will be able to find and renew health insurance policies through these exchanges. The federal government expects that several million people will find coverage through these exchanges, but many more will forgo coverage entirely. Health insurance coverage is expected to become more expensive in 2016, with insurers raising premiums.

Uninsured consumers could have to pay as much as 2.5% of their annual income on tax penalties

Those without insurance coverage will face financial penalties from the federal government. These penalties are part of the Affordable Care Act, which requires all U.S. citizens to have some degree of health insurance coverage. Tax penalties for those without insurance coverage are meant to serve as an incentive to encourage consumers to purchase insurance policies. In 2016, uninsured consumers will have to pay $695 or 2.5% of their yearly income, whichever is greater, on tax penalties.

Federal provision continues to generate controversy

health insurance cost medicalThis provision of the Affordable Care Act, also known as the individual mandate, has been the source of controversy since the federal law was passed in 2010. Opponents of the Affordable Care Act have argued that this provision of the federal law will lead to significant financial pressure for consumers, especially those that cannot afford their own health insurance coverage. While the federal government does offer subsidies that are meant to help make coverage more affordable, but these subsidies are not available for everyone. Those that are not eligible for the subsidies, yet do not earn enough money to afford coverage, could face serious financial strain for being uninsured.

Lack of health insurance is becoming a costly problem for consumers

With premiums on the rise, many consumers are expected to find it more difficult to afford their health insurance coverage. If consumers lose their coverage, they will still be susceptible to tax penalties, which will be issued by the Internal Revenue Service. Consumers are required to note whether or not they have health insurance coverage when they file their taxes every year. Those that did not have coverage in 2014 would, therefore, face penalties from the federal government.

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