Not Planning to Buy Health Insurance? Here’s What’s Going to Happen to You

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It may seem like a clever idea to save yourself cash by not purchasing health insurance, but with Obamacare kicking in, you’ll have penalties to pay, which could cost you big bucks in the long run.

Not only are you playing financial Russian roulette – you could be forking out tens of thousands or hundreds of thousands of dollars if you’re injured in an accident or become seriously ill – you’ll also have to pay a penalty to the federal government for flouting the law, costing you hundreds or thousands of dollars more.

A wiser decision if you’re uninsured is to start shopping on your state health exchange, which opened Tuesday — with glitches — as a key part of health care reform.

Money Talks News founder Stacy Johnson has information in the video below about the penalties you’ll face if you ignore the law. Check it out, then continue reading for more details about health reform.

It’s OK if you feel at a loss about the Affordable Care Act, which is also known as Obamacare. You’re not alone. A newly released survey by the Commonwealth Fund found that only 4 in 10 adults were aware of the health exchanges and the financial subsidies available to help cover costs when you buy insurance there, and only one-third of those without insurance were aware of the new way to shop for health insurance.

In the first quarter of the year, 46 million Americans didn’t have health insurance, according to the U.S. Centers for Disease Control and Prevention. The establishment of the state health exchanges, or insurance marketplaces, is designed to reduce the number of uninsured.

Who needs insurance?

Starting next year, almost everyone will need to be insured. You can purchase that insurance on your own or through the exchange, have it through your employer, or have it provided by government programs such as Medicare, Medicaid, the Children’s Health Insurance Program, TRICARE and veterans health insurance programs.

There are some limited exceptions, such as for those who earn a very low income or are members of certain religious groups, as shown in this graphic by the Kaiser Family Foundation.

While you can start shopping for insurance on a state exchange now, the policies don’t take effect until Jan. 1.

What if I don’t buy insurance?

If you skip the insurance, you’ll pay a penalty. For 2014 the fine is $95 for an individual or 1 percent of your income, whichever is greater, along with $47.50 per uninsured child, maxing out at $285 for the year.

But by 2016, an individual would pay $695 or 2.5 percent of your income.

The TurboTax website has a calculator to help you determine how high a penalty you’d pay.

Without insurance, you’d also face a double whammy. By 2016 you’d be forking over almost $700 to the federal government and having nothing to show for it, and still have to pay your own medical bills if you’re injured or become ill.

What will insurance cost?

The exchanges will sell four levels of policies — platinum, gold, silver and bronze. Bronze plans will have the lowest premiums, but cover only 60 percent of costs. Platinum, on the other hand, will have the highest premiums, but cover 90 percent of costs.

If you earn up to 400 percent of the federal poverty level ($45,960 for an individual and $94,200 for a family of four this year) you’ll be eligible for a subsidy, which will come in the form of a tax credit. Subsidies are based on your family size and your earnings. The less you earn, the higher the subsidy.

With the subsidies, more than half of Americans should be able to find health insurance for less than $100 a month, according to the U.S. Department of Health and Human Services, although you might choose to pay more.

There also will be caps on out-of-pocket costs. Typically, the maximum an individual will pay in co-payments and deductibles next year is $6,350, and a family’s costs will be capped at $12,700.

What if you delay?

Because you can’t be turned down for health insurance under the Affordable Care Act if you have a pre-existing condition, you might be tempted to dawdle and see if you actually get sick before purchasing insurance.

But that strategy could easily backfire.

You’ll only be able to buy insurance on your state health exchange through March 31, 2014. After that, the open enrollment period will run from Oct. 15 to Dec. 7 each year.

There are exceptions that allow you to purchase insurance on the exchange at any time of the year if you experience a life-changing event, such as moving to a new state, getting married, getting divorced, or having a baby.

While you can purchase insurance outside the exchange at any time, you won’t be eligible for a government subsidy, which is one of the cornerstones of health reform.

Bottom line: Ponying up for health insurance now can potentially save you from astronomical costs down the road.

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Comments & discussion

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  • StrangerInAStrangeLand1

    You can only buy catastrophic if you are under 30 now apparently. Can’t have you getting off scott free and not ponying up those huge insurance premiums now can we?

  • 21HillsSt

    Define fail. Previously healthy young people paid nothing and still received treatment. Getting them to pay anything is an improvement.

    • Osamas Pajamas

      Simple. Repeal the government requirement that medical services be provided for free to all comers.

  • Jackie Nichols

    I was all for national health care, but looking at the plans available to me under obamacare, I would just be throwing money away. The cheapest “affordable” plan would still cost me over $300 per month and it has such high deductibles and co-pays that it is worthless. The plan wouldn’t pay a dime until I paid $6500 out of pocket! I’ve never had $6500 of medical bills in one year in my entire 45 years. At least now, I can afford an office visit and basic care when I’m sick. Under obamacare, all my disposable income would go towards the premiums and I’d have no money left to go to the doctor! I’m much better off just paying the penalty, especially since there is no restriction on pre-existing conditions. I’ll wait until AFTER I get a serious illness to sign up. At least then I’ll be getting my money’s worth out of the premiums.

    • 21HillsSt

      Don’t get in a car accident. If $300 is all your disposable income, you need to get a better job.

  • pam

    Alley Kat This is what kills me! There are SO many people who cannot afford ANY kind of insurance! So for people like you, who cannot afford it, what does the government do?! They PENALIZE you for being poor!! And you are right! No matter how bad a criminal is or what they have done, THEY are the ones who are taken care of!! This government we have is so broken I fear it will never be fixed–at least until Obama is gone!

  • Sherrie Ludwig

    I am disgusted by the posters here who have NEVER VISITED THE EXCHANGE and are passing around bad information. Before you open your mouth, go see what is available and how much after subsidies you actually will pay. I have insurance through my husband’s work, but investigated the exchange as though we did not. We have a solid middle-class income, but my husband is a cancer survivor with asthma. Insurance before the elimination of pre-existing condition clauses would have been impossible. We would pay less for a good plan per month than we pay to feed our pets (a medium-size dog and a cat).

  • Sherrie Ludwig

    Have you applied? Have you seen the subsidies for your chosen plan? There is a person in my community (a loudmouth Obama-hater) who changed her tune when she found out that her silver plan insurance will cost her LESS THAN A DOLLAR A MONTH. (yeah, I thought she was mistaken, but, no,that’s right) Go apply, then come back and show your results.

    • Osamas Pajamas

      THE AGE OF BARAK BAIT-AND-SWITCH OHBUMMER — KING OF THE REPUBLIC OF LIES

      OhBummer is a pathological b00b and a fool for attacking the American Tea Partiers.

      Heck, he thought that he had all of us hoodwinked, hornswoggled, and bamboozled.

      He’s annoyed that the Tea Partiers are not grateful to him for hijacking the American healthcare system — the greatest act of vandalism perpetrated upon the American people since a gang of jihadi frootloops and loonytoons hijacked some planes and crashed them into the World Trade Center towers — and the Pentagon, and made a failed attempt to crash into the White House — and instead drilled a hole in a Pennsylvania farm thanks to some very courageous American passengers.

      And — now widely seen for what he is — the president presents a problem for the Democrat-captured media. They pump out his propaganda for him — and, like the opinion monitors in Ayn Rand’s novel, “Atlas Shrugged” — they are dodging brickbats and rotten vegetables.

      He’s pompous, pampered, and pretentious — a pseudo-intellectual fop. He’s a glorified, smooth-lyin’ dandy, and slicker than Sick Willie Clinton. He’s a dictator-on-the-make, a bloodsxcking, predatory humanitarian thug, and a low-down skunk.

      He’s a fraud and a swindler. He lies when he inhales and he lies when he exhales; his oxygen is the falsification of reality. He lies, placidly and laconically, as if deception were a soporific drug.

      Lies, after all, are the heart and soul and the sword and shield of the Democrat party.

      He’s a friend of the poor and the downtrodden — indeed, you can hear the milk of human kindness sloshing around inside of him when he walks.

      He declares himself the post-racial leader — “Let me be clear!” he intones — and he hides behind his race, daring his critics to put their reputation for fairness at risk.

      He pauses to ponder the portent of his propaganda — and it is fakery; he smiles and his mendacity comes shining through.

      Shake hands with Barak Hushpuppy OhBummer — “The Mistake of ‘08” — the illegal alien squatter in the White House until his “papers” have been lab-tested for age and chemicals, etc — the community agitator for the OhBummer Wrecking Crew — the fascist Fleabagger-in-Chief — the closet Muslim with the mix-and-match morality — the racist King of The Republic of Lies — and America’s first and last Arab president.

      Now count your fingers.

      http://www*youtube*com/watch_popup?v=tCAffMSWSzY#t=28

      ==========================
      START A PRAIRIE FIRE!

      START A TEA PARTY TSUNAMI!

      START A TAXPAYER REBELLION AGAINST THE TAX-EATERS!

      SHARE THESE SENTIMENTS WITH YOUR FAMILY, FRIENDS, AND NEIGHBORS, TODAY! $

  • Peter Rathbone

    Here’s an idea…

    Quit your job
    File for bankruptcy
    Get food stamps, disability and medicaid!
    PROBLEM SOLVED! And it didn’t cost “me” a dime!

  • Joanne Bridgman

    Nowhere
    in this article does it mention that the deductibles ranging from $6350 to
    $12700 is a very high expense. The health insurance I have through my employer
    caps my deductible for a family at only $2000. How is the average person or
    family making a modest income supposed to pony up almost as much as 13 grand
    depending on circumstances? Also, what is the tax credit you receive as a
    subsidy? That sounds like a fishy way to squeeze more money out of you and still
    leaves you with a pretty steep monthly premium to have to pay until you get said
    “tax credit.” As many people have asked, where’s the “affordability” in all of
    this?

  • NRS1957

    “…..you’ll also have to pay a penalty to the federal government for flouting the law, costing you hundreds or thousands of dollars more.”

    Now where did these numbers come from? Can’t sell it with the carrot, so out comes the stick. lol

  • Osamas Pajamas

    Looks like Unkle Skum is making threats against the American people — and that Kaiser is a collaborationist profiteer. Everyone should get well-armed and well-ammoed, arrange their deductions and bank accounts so that there is nothing for IRS to steal from them, boycott OhBummerCare, and use deadly force against anyone who initiates or threatens to initiate deadly force against them. Destroy this dictatorship. Do it now.

  • Osamas Pajamas

    OVERTHROW OHBUMMERCARE!

    With apologies to the Kingston Trio and to Thomas Paine, these are the times that try men’s souls.

    In the course of our nation’s history, the American people have rallied bravely, whenever the Rights of Man have been threatened.

    Today a new crisis has arisen — the launch of OhBummerCare — a poisonous gift from Barak Bait-And-Switch OhBummer and his confederacy of schmucks. And where are the Republicans?

    They are dithering. They are candles in the wind. They flicker in one direction, and then another — and there are less kind observations now afoot, across the fruited plain.

    The Republicans cannot find their bums, with both hands and a flashlight.

    They keep their cojones locked in a bank vault — although if they were valuable to Republicans, you’d think that they’d take them out for a spin, once in awhile, now wouldn’t you?

    When asked how best to destroy the Soviet communist dictatorship, novelist and Nobel Prize winner Aleksandr Isayevich Solzhenitsyn replied, “Don’t lie.” The corollary of that injunction is, “Tell the truth.”

    You can keep your plan and your doctor if you want to? You’ll save on average $2,500 per year in premiums?

    Any such fraud in private industry would land the perp in the clink — and good riddance to him, too. But OhBummer is armed and dangerous.

    This is a gangster government, of Barak Bait-And-Switch OhBummer, and the OhBummer Wrecking Crew.

    This is a dictatorship. If Republicans fail to smite it a mighty blow, then they are cowardly and worthless.

    Did I leave anything out? For what do we need the Republicans, if they will not fight?

    For now, just fund everything except OhBummerCare and let the Democrats shut down the government.

    It does not matter that the fascist Democrat-captured media will lie and blame the Republicans.

    The Democrats always lie. Lies are the heart and soul and the sword and shield of the Democrat party.

    To the Senate or House Republican I say this. “Be a man. Drive a wooden stake through the heart of OhBummerCare.

    “The vast majority of the American people do not want OhBummerCare — so be a Happy Warrior — and kill it.”

    ==================================================

    START A PRAIRIE FIRE!

    START A TEA PARTY TSUNAMI!

    START A TAXPAYER REBELLION AGAINST THE TAX-EATERS!

    SHARE THESE SENTIMENTS WITH YOUR FAMILY, FRIENDS, AND NEIGHBORS, TODAY! $

  • baitmando

    The Obamacare train wreck will be a thing of beauty. May the Dems suffer for decades to come. They and the mainstream have been propping up this moron Obama for 5 years and counting. Burn in hell all of you for destroying this great country.

  • nitemare2

    If he gets a subsidy some one else is paying for it, if he is on Medicaid someone else is paying for it. If he is paying his own without a subsidy he has high deductibles and co-pays so which is it. And if he is making less then $50 k a year chances he is not paying any income tax. So Mims tell me how your liberal math works again. And that “many” are being paid for by others, but again that is the liberal way someone else will pay.

  • nitemare2

    Yes Mims expand everything and let someone else pay for it. Who pays for the expansion of Medicaid? Taxpayers and don’t say it’s coming from Washington because with out tax money that SOMEBODY pays they don’t have a penny to send anywhere, and after the money promised by Obama to the states goes dry who picks up the money for the expansion, the state. Liberal math expand the freebies and just tax more.

  • 21HillsSt

    You’re right. People without insurance should have the liberty to pay their entire medical bill out of pocket – or be refused care.

  • nitemare2

    You really need to quit throwing stones, and look at the
    facts, so according to the President 4M signed up? First, how credible is this given our
    President’s tendency to tell whoppers when he is in trouble? Second, how many are these people are just
    simply signing up for Medicaid who were already eligible, and forced to re-sign
    up? And more important, how many of
    these are “new” uninsured enrollees, as opposed to those millions who
    lost their coverage, and had good coverage? The head of HHS said 7 million was
    the number they needed by March 31 2014 and 6 months later she says she doesn’t
    know where people got that number. Without between 23- 26% of those new
    enrollees being under the age of 30 healthy and not receiving any subsidy the
    plan will not work that is also what the CBO stated, and if the insurance
    companies don’t make a profit what happens? And all the economists on both
    sides say it will become a death spiral and either fail, or cost the taxpayer
    vast tax increases. Obama shot himself in the foot and continues to do so. They
    need healthy working 18-30 year olds and then they allow those people to stay
    on their parent’s policy until 26. Reid says “they will be glad to get
    their own policy and pay for it.” Talk about an idiot his picture is in
    the dictionary alongside the definition of idiot, “people will be happy to
    pay higher taxes”, “all the horror stories are false and the people
    are all liars”, “Romney cheated on his taxes”, Obama
    promised you can keep your policy and doctor if you like them and 6 million
    lose their coverage because they were “inferior” according to him, then he
    changes the law to kind of allow it when he needs them to have his plan work,
    fact the CBO stated the savings the President promised is really a math trick
    because the rates will just not go up as high as thought. Again it’s the
    liberal definition of a cut, like the budget cuts Obama keeps saying he has
    done when it really means he asked for $2 trillion increase and only got $1.8
    trillion. And if and that’s a very big if we got $8 billion over 3 years that
    would be enough to cover what? The fed portion of Medicaid spending will
    increase by $952 billion (a 26% increase) per year. On the other hand, premiums will be much more
    expensive for millions of people, even after the subsidies, making it harder
    for them to continue paying them. And
    that could be especially true for people who have been uninsured for years. They weren’t spending anything on health
    insurance, so making 12 monthly premium payments is a major new financial
    commitment. And there is another factor: Obamacare requires insurers to carry a
    policyholder for 90 days before canceling the policy for not paying the
    premiums. That’s significantly longer
    than most insurance company grace periods.
    The provision allows people to sign up for coverage, pay the first
    month’s premium, and get major surgery and the needed follow-up care over the
    next three months without paying any premiums.
    When a law financially benefits people for gaming the system, don’t be
    surprised when people game the system. So If the Obamacare individual market
    lapse rate mirrors or exceeds the pre-Obamacare lapse rate, it will further
    destabilize the insurance pool and make it even more likely that the government
    will have to come to the rescue with an insurance company bailout.

  • http://www.moneytalksnews.com/ Stacy Johnson

    If you see other posts with that kind of language, nitemare2, point them out and they’ll get the same warning.
    As for your other points:
    1. I obviously don’t “control conservative posters,” since they’re all over the site.
    2. Obamacare and the minimum wage aren’t the “liberal agenda.” They’re news, and every news outlet, including this one, reports on them.
    3. The news on this site is largely curated and written by people other than me. I’ve set no agenda for my staff to follow, liberal or otherwise.
    4. I expect everyone using this site to be civil. I don’t think that’s too much to ask.

    • nitemare2

      You say that Obama care and minimum wages are not the “liberal agenda” just news. How many republicans voted for Obamacare, was it passed through normal voting procedures for laws, the reconciliation procedure was made for strictly budget bills as the senate and Pelosi were informed by the person who wrote the procedure. Show me the conservative who is for the raising of minimum wages. These things have been strictly democrat/liberal/progressive/union agendas forever. Your reporter who keeps writing the McDonald/Wal-Mart hate pieces disguised as minimum wage articles gives no opposing facts only how horrible they are. She and other so called news media keep using Costco as a comparison when you can’t because they charge membership fees to pay for their employees and have about 10% of the employees of Wal-Mart. McDonald’s are franchises so what corporate profits are does not mean anything to what the individual stores can or cannot afford to pay. So why doesn’t Krystal say any of that? Why don’t you give opposing views to give your “news” a fair and balanced article? You have told me before that you are a proponent of Obamacare and minimum wage increases which is fine but at least be open minded to other views or you become MSNBC which is nothing more than a Obama propaganda outlet and has the rating to show it.

  • Sarah

    I hope people realize that the programs known as Medicaid, Medicare, and Social Security were passed as SUPPLEMENTARY welfare programs. Meaning that all Americans are responsible for their well-being and you are not meant to use any such program as a form of “public retirement income or healthcare”. They were meant to care for those in the worst shape and not for people to use as an excuse to spend everything they get.

    When these programs were first implemented retirees using Social Security died in less than a decade and didn’t get all of what they paid into it. That’s why there was a surplus and some generations were paid more than others. Now you have people milking the systems for up to three DECADES with expensive chronic diseases. Coupled the high cost of health care, with inflation, cost of living, and a younger generation earning less you’ve got a nightmare of catastrophic proportions on the horizon. No Politician wants to touch this with a Hazmat suit on because cutting benefits and raising the retirement age will have to be done. Taxes may have to go up and more unpopular ideas will have to be discussed but business as usual in Washington won’t work anymore. We need to get people to pay their fair share and dare I say stop payments when people get out of it what they paid into it. On average those on these welfare programs consume up to five times what they paid in over a lifetime. This is not sustainable and when doctors are now refusing to treat people on these programs it helps no one.

    The ACA is just a bandage that won’t work in the long run and health care is still too expensive. Our outlook and attitude as a society who feels others owe them a retirement/healthcare/living needs to end or we will all pay a terrible price. Everyone needs to work, be educated about coverage, work to take care of themselves, and we need to find a solution for health coverage that really works. We may have to rework the ACA but either way, I don’t think this will fix the major problems we still face.