With the Affordable Care Act set to be fully implemented in January of 2014 how much thought have you given to how the law will affect you? Starting January 1st Americans will be required to purchase health insurance or pay a tax penalty. Before you get defensive or incited, take a moment to think about your options.
The numbers
Some people are already saying that they would rather choose to pay the penalty instead of buying health care coverage for themselves. Here’s the skinny on that penalty. For the 2014 year the penalty for not having insurance is $95 dollars per individual or up to 1% of your annual income, whatever is higher. In 2016 that rises to $695 per individual or 2.5% of your annual income, again at whichever is higher. For families the tax penalty is capped at $285 dollars in 2014 and rises to $2,085 or 2.5% of household income in 2016.
Those numbers probably seem pretty shocking, especially if you are a low income earner. Here’s the good news, starting October 1 of this year online marketplaces or insurance “exchanges” will be opening their virtual doors for business. They’ll be selling coverage set to start January 1st. Here’s where the news gets better, when you buy through the exchange your income may qualify you for discounts and government tax credits to help pay for the premiums.
Why bother
Historically insurance premiums only do one thing, and that’s go up. In fact, several insurance analysts and companies have even said that rate increases are inevitable. It’s also no secret that money continues to be a limited commodity for most people. But, if you can swing it, opting to purchase a health insurance plan now could save you some scratch in the long run.
The whole reason to have health insurance is in case something happens. The most common reason people give for not buying health insurance is that it’s expensive. It’s not something you think about when the most you’ve ever needed for an ailment was some cold medicine. But if something serious happens then you’ll be regretting the decision to not have coverage to help with your medical bills.
Affordable and proper coverage
The most common reason that people declare bankruptcy in the United States is because of unpaid medical bills. The sad truth is that the majority of those people actually had health insurance, but the coverage was inadequate. It’s your health, and as a consumer your responsibility to look out for yourself. The upcoming online marketplace will give you many options, and the available tax credits may actually help you afford a level of care that adequately suits your needs.
You don’t need to wait to be told to buy insurance. Look into the options available, as an early adopter you’re more likely to find a better rate plan, one that saves your wallet, and should you ever need it, your health as well.
Dennis Aimes is writer with the insurance specialists at HBF.
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