According to the rollout timeline for the Affordable Care Act (ACA), we may be in the eye of what has been a long and complicated first stage of policy implementation. Where are we on that timeline exactly?
Let’s review:
- Launch of healthcare exchange plans-October 1, 2013
- Penalty deadline for entries coverage-January 1, 2014
- Insurance selection deadline to claim exemption from ObamaCare tax penalties – March 31, 2014
While the error-filled website launch didn’t help matters when it came to causing a 34-state pileup during the initial sign-up process; the government (Top Men) assures us they are working to fix the problem. As problems go, it turns out that catastrophic technical problems on a $500 million website may not be the biggest concern officials must tackle in year one. For more details about what’s around the bend, we actually need to set the clock back to 2009.
On a Mission to Myth Bust: Overblown Fact vs. Elastic Fiction
The technological dream team (Top Men) can continue to tinker and patch invisible holes in the background. Assuming everything is up and running as planned by March, there is a more prevalent issue to discuss: those ObamaCare tax penalties we mentioned earlier.
Due to the high amount of spin doctoring on both sides of the aisle, it can be difficult to decipher fact from fiction; a distinction that is extremely important to know when it comes to your tax bill and your wallet.
Considering this serve and volley pattern has been going on since before the bill even became a law (early debates of 2009), there is a fair amount of fuzzy rhetoric to sift through before you get to the bottom line. Realistically, your ObamaCare tax penalties will depend on two things:
- Insurance premiums
- Affordability
Rather than making this picture drastically dark or refracted and opaque; let’s shoot for something that resembles a middle ground (As someone may have said a few times, "a balanced approach.")
Caught between Two Rationales: The Truth about the ACA Penalties
As of now, 15% of the country is uninsured and in debate. They’re wondering if the healthcare exchange program is really “more affordable” than insurance coverage that is available on the open market.
Part of the problem is 10% of the uninsured don’t qualify for the federal subsidies that were supposed to make healthcare less costly. Stuck between a rock and a hard place, they have to decide whether taking the ObamaCare tax penalties is the lesser of two evils. The answer: it depends.
The answer seems ambiguous until you take a closer look at how the premiums are structured. The ACA puts restrictions on the qualifications for coverage through an insurance provider.
They are:
- Prohibited from increasing the premium for a person with a pre-existing condition
- Basing the premium on gender
- Charging older policyholders more than three times what they charge younger policyholders
The premiums may vary based on geography and smoking status as well. There are high-deductible catastrophic plans available, but they have to be purchased without federal subsidy.
What does all of this really mean?
In a nutshell, it means if you are young and healthy without any pre-existing health problems, you will be charged a higher premium on an exchange plan; consider paying the ObamaCare tax penalties, at least for the first year.
If you are among the older folk, you won’t be facing sky-high premiums according to current ACA laws, so picking an insurance plan is probably the wisest move.
This logic applies to the average uninsured person, not every uninsured person. Take this advice with a prescription sugar pill and do your research. Cover your bases with early tax help in 2014; pre-emptive action is best.
