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Sunday, October 23, 2016

By Colleen Diskin, The Record

HACKENSACK, N.J. — On Monday, the federal government shifts from being a cheerleader for the law requiring all Americans to buy health insurance to an enforcer with the power to tax those who don’t comply.

Those who remain uninsured after that date and who don’t fall into an exempt category, could face a tax penalty — and it may not be as small as they expect.

The oft-cited minimum tax penalty set by the Affordable Care Act is $95 a year. But that’s just the rate for single adults earning less than $19,500 a year. Individuals and families earning above that could end up paying hundreds or even thousands of dollars if they don’t buy a health insurance policy by the deadline on Monday.

The tax rate will double in 2015 and grow each year after that.

“The penalties can be bigger than a lot of people might realize,” said Roberton Williams of the non-partisan Urban Institute and Brookings Institution Tax Policy Center, whose organization has added an “ACA tax penalty calculator” to its website to help people determine their potential tax penalty.

Since the launch last year of the federal and state marketplaces for health insurance under the Affordable Care Act, numerous advertisements and outreach events have attempted to educate the public about the benefits of buying policies under the law. The government has promoted its carrot — subsidies to help make the insurance affordable — in its attempt to get people to sign up for coverage. Now, it’s time for the stick.

It was the threat of this penalty that persuaded 25-year-old Amanda Vangrouw of Wayne, N.J., to seek out an enrollment center this past week to find out her options for coverage.

A day-care worker and William Paterson University student, she said she hasn’t been able to afford health insurance for the past six years. She went to the center Tuesday to find out if she was eligible for a subsidized policy or an exemption from the tax penalty if she couldn’t afford insurance through the program, known as Obamacare.

Vangrouw ended up being advised that she was eligible for free coverage under New Jersey Family Care, the state’s expanded Medicaid program.

But others are doing their own calculations, weighing the cost of a paying insurance premiums — say, $2,628 for a single person earning $50,000 — against the potential tax — $399 in 2014 — and opting not to enroll this year because its still cheaper to take the tax hit.

Williams encourages people to look at the overall financial benefit of having insurance to cushion themselves against unexpected health care costs rather than just comparing premiums and penalties. “The premiums are almost certainly bigger than the penalty, but if you pay the premium, you have insurance,” he said “The calculus is not which is bigger, it’s which has the bigger benefit.”

  • bstockinger

    What those without insurance are really saying they want the rest of us to assume their health risks. The uninsured get treated, it just that the rest of us end up paying their hospital bills through either a county hospital or by higher bills. No one can convince me that many 29 year olds, without insurance, that are hospitalized with a resulting $20,000 to $30,000 bill can actually afford to pay it.

  • latebloomingrandma

    That young Republican is very foolish. How delusional to think you’re invincible. He is one car accident away from bankruptcy. Some people have to learn the hard way.

  • Allan Richardson

    Breaking an arm is not the only risk faced by “healthy” people. Every once in a while we read about a young (or youngish) person who SUDDENLY has the symptoms of a totally undiagnosed disease. Arteries burst with no warning (except the warning given by an angiogram, if one was taken). “Pistol” Pete Maravich, star LSU basketball player in the 1960s and NBA star after graduation, continued playing pickup games after retirement, and was thought to be perfectly healthy, but he died of a heart attack at age 40 while playing a pickup game with friends. High school football players have heart attacks or strokes (rarely, but it happens). Some of these risks, if they are not immediately fatal, require far more expensive acute care, and sometimes expensive and lifelong follow-up care, than a simple fracture. How many of us could “just pay the bill” for that?

    A brilliant, but not YET distinguished, physics graduate student, who was also athletic, was suddenly diagnosed with ALS (Lou Gehrig’s disease) at the beginning of an academic career of great promise. Without insurance, or with inadequate insurance, he would have lived a few more years in misery and isolation (because help in communicating would have been too expensive) and died unknown. But he had insurance because he was born in the United Kingdom. Today you may know him as one of the greatest physicists in the world, traveling the length and age of the universe despite his paralysis: Dr. Stephen Hawking (not sure if he is Sir Stephen yet, but he probably will be).

    Obamacare is not the absolutely best way to pay for health care but it beats the “status quo ante” unless you are very rich — and if you are, it doesn’t matter to you either way.

  • ralphkr

    Young Mr. Enriquez demonstrates the typical selfish mindset of Republicans. He refuses to plan ahead and get insurance because he is young and healthy while leaving unsaid that he knows that if some unforeseen tragedy strikes (accident, cancer, etc.) then we taxpayers shall pick up the tab for his Emergency Treatment.

    This article also points out what I have been saying for years is a fatal flaw in the plan because there actually is NO penalty. All along I have been saying that there should be a minimum penalty of $1,800 for a single person regardless of income and that should be taken out of with holding before any of it is applied to taxes.