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Surviving Obamacare: The Individual Mandate

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HS - Jason Hartman Income Property InvestingWe just paid a visit to Healthcare.gov and, surprisingly, were able to browse through the much-maligned website with relative ease. There was one section in particular that caught our interest, and it described the procedures behind the “individual responsibility payment,” or sometimes referred to as the “individual mandate.” The basic idea is neatly summed up with the following quote from Healthcare.gov.

If someone who can afford health insurance doesn’t have coverage in 2014, they may have to pay a fee. They also have to pay for all of their health care.

Jason Hartman reminds you that the basic idea is the government has decided you MUST choose a health insurance policy or pay a fine. We’ll set aside the odious price paid in liberty and freedom of choice for the moment, and simply look at the penalty. How much is it going to coast the average American to thumb their nose at the insurance requirement?

Once again, taken from the website, here’s the penalty you can expect to pay in 2014. It goes up in subsequent years.

The penalty in 2014 is calculated one of 2 ways. You’ll pay whichever of these amounts is higher:

  • 1% of your yearly household income. The maximum penalty is the national average yearly premium for a bronze plan.

  • $95 per person for the year ($47.50 per child under 18). The maximum penalty per family using this method is $285.

As mentioned, the fee increases annually. In 2015 it’s 2 percent of income or $325 per person. In 2016 and on it will be 2.5 percent of income or $695 per person. After that it will be adjusted for inflation. You can also expect that it might be arbitrarily cranked even higher as needed in order to meet the financial shortfall created by millions of young Americans who decide to opt out of health insurance completely.

But the uninsured can just show up at an emergency room for treatment, right?

Though federal law requires any hospital that accepts Medicare or Medicaid to provide treatment for anyone who shows up with a medical emergency, this applies only to incidents like a heart attack or car wreck. And it’s not “free” at all. You’ll still get a bill and it’s liable to be to the tune of many thousands of dollars. Those suffering chronic disease treatment for something like diabetes will be out of luck, unless they’re in the midst of a low blood sugar coma.

Next time we’ll talk about how you might be able to not have insurance and get out of paying the individual mandate penalty. (Image: Flickr | charlesfettinger)


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