Who pays the Obamacare penalty--low and middle income mostly

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johndoe3
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Who pays the Obamacare penalty--low and middle income mostly

Post by johndoe3 » Wed Oct 11, 2017 2:20 am

http://www.foxnews.com/politics/2017/10 ... ncome.html

I wondered which income groups would most likely choose to pay the annual tax penalty for not having health insurance? As it turns out, 79% of that group had household income of $50,000/yr or less. The ~6.7 million households probably means at least 14 million people choose to tell the government to stuff it with their mandatory health insurance requirement.

Info is from 2015.
There were 6,665,480 households who chose to pay the Obamacare penalty in that year rather than signing up for Affordable Care Act coverage. They paid a total of $3,079,255,000.

Of the 6.7 million households who chose to pay a penalty, 37 percent—2.5 million households—earned a salary less than $25,000 per year. There were 5.2 million households that earned a salary less than $50,000 per year who decided to pay the penalty, which totaled 79 percent of households paying the penalty. Finally, 92 percent of the households—6.1 million households—paid the penalty and earned less than $75,000 a year.

The penalties have increased every year since the Affordable Care Act was implemented. In 2014, the penalty totaled a flat fee of $95 or 1 percent of income above the filing threshold. In 2015, the penalty increased to a flat fee of $325 or 2 percent of a household's income, whichever one was higher. In 2016 and 2017, the penalties increased even higher to a flat fee of $695 or 2.5 percent of gross income.
I'm guessing that many of those choosing to pay the penalty tax and forgo health insurance are the young and healthy.
You can fool all of the people some of the time, and some of the people all of the time...and those are pretty good odds.
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T-Rex
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Re: Who pays the Obamacare penalty--low and middle income mostly

Post by T-Rex » Wed Oct 11, 2017 11:43 am

For even the shittiest plan, for my wife, the penalty is less than half the total cost of annual premiums. Primary Care facilities and Hospitals work w/ you and give nice relaxed pricing if you don't have insurance. Plenty of coupons for Rx that drop the costs to less than if you used insurance.

Aside from getting diagnosed w/ something serious, you're surely better off (financially) to pay the penalty.
johndoe3 wrote:I'm guessing that many of those choosing to pay the penalty tax and forgo health insurance are the young and healthy.
My CPA told me she started paying the penalty 2yrs ago. Between her and her husband (both 65+), the annual premiums were insane (upwards of $18k/yr). By the time you add in deductibles, copays, and out of pocket expenses, you'll find that you need another job just to pay for the healthcare.
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johndoe3
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Re: Who pays the Obamacare penalty--low and middle income mostly

Post by johndoe3 » Thu Oct 12, 2017 12:35 pm

I hear you.

Many people do not know it, but the tax system is incredibly unfair in the USA in relation to deductible health insurance costs. Those who are employees of large corporations get to pay their health insurance pre-tax, while those who are working in LLCs, LLPs, S-Corps, and Schedule-Cs in small business do not get to deduct their health insurance pre-tax (since the tax reform in the mid-1980's).

Your CPA friends should have been able to deduct their health insurance pre-tax except for the deliberate unfairness of the Tax Code. And Congress in the past created this unfairness knowingly and deliberately. Why? their reason was that it cost too much in lost taxes to the USA government to allow everyone to deduct their health insurance pre-tax. So only those working for big corporations (crony capitalism) get pre-tax paid health insurance. end of rant :wink:

T-Rex, what happens to those paying the penalty instead of getting the mandatory government health care, as the penalty keeps rising? Starting in 2018 the penalty is going to get much larger.

Lastly, the age 65+ CPAs still working could choose to sign up for Medicare (everybody at age 65). There is a monthly cost for Medicare Part B, and if they want full coverage for everything with small deductibles then they need a Part D policy in addition (Medigap). All that would be less than half the $18k annual cost for non-Medicare insurance.
You can fool all of the people some of the time, and some of the people all of the time...and those are pretty good odds.
Brett Maverick, gambler on TV (also used by Progressive leaders everywhere)

noname
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Re: Who pays the Obamacare penalty--low and middle income mostly

Post by noname » Mon Sep 21, 2020 7:02 pm

I probably should not be dredging up old posts "but" this is the election season. As an example, I am 70+ and my wife is 65+. Both retired or more correctly, to old and beat-up by working all my life to work anymore. Our combined income is less than $50K a year and that includes Social Security. I have a Medicare supplement that cost $209.45 a month with a drug coverage plan that costs an additional $22.50 a month. My wife has a Medicare supplement that costs $178.00 a month and drug coverage cost an extra $22.50 a month. Health insurance cost us a combined $432.00 a month. Our only extra money comes from working, paying taxes and saving since I was 16 years old. A niece of mine who just graduated from college was shocked to find out those on Medicare, like us did not get free healthcare.

Somebody is gaming the system but it is not us.

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Re: Who pays the Obamacare penalty--low and middle income mostly

Post by noname » Mon Sep 21, 2020 7:11 pm

I failed to mention we still have to pay a drug copay, depending on the drug and how it is tiered. And a healthcare copay depending on what it is billed.

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