Wednesday, January 27, 2016
Associated Press
WASHINGTON
Millions of young adults healthy enough to think they don’t need insurance face painful choices this year as the sign-up deadline approaches for President Barack Obama’s health care law.
Fines for being uninsured rise sharply in 2016 – averaging nearly $1,000 per household, according to an independent estimate. It’s forcing those in their 20s and 30s to take a hard look and see if they can squeeze in coverage to avoid penalties. Many are trying to establish careers or just make progress in a still-bumpy economy.
“There’s only so far one can dwindle a ramen- noodle diet,” said Christopher Rael of Los Angeles. In his late 20s, Rael is pursuing a degree in sociology and working at a children’s center to pay his bills.
With open enrollment over after Sunday, Rael is hoping his meager income will qualify him for Medi-Cal, the state’s version of Medicaid. “I cannot afford an additional bill,” he said. He paid a fine of about $150 for being uninsured in 2014.
The minimum penalty rises to $695 in 2016 for someone uninsured a full 12 months and not eligible for one of the law’s exemptions. That’s more than double the corresponding figure of $325 for 2015.
In practice, the fines will be higher for many consumers. That’s because the law sets the penalty as the greater of $695 or 2.5 percent of taxable income this year. A study by the nonpartisan Kaiser Family Foundation estimates the average 2016 penalty at $969 per uninsured household.
Fines are collected through the tax returns of uninsured people and in most cases deducted from their tax refunds. The penalty amounts will be increased by a cost-of-living factor in future years.
Penalties are the health care law’s nudge to get healthy people into the insurance pool, helping keep premiums manageable for everyone.
Until now, the administration mainly has stressed the benefits: subsidized premiums and protection from the costs of unanticipated injury or serious illness. But with concerns that many young and healthy people still aren’t sold, officials are invoking the threat of penalties.
The pressure of rising fines is butting up against the economic situations of uninsured people, nearly half of whom said in a recent Kaiser poll that they’ve tried, but coverage is still too expensive. A big sore point has to do with high deductibles for many health-law insurance plans, which can leave consumers with thousands of dollars in medical bills.
Though rising penalties could boost health care sign-ups this year, that’s not likely to win hearts and minds for Obama’s Affordable Care Act, which remains politically divisive.
“We are talking about paying premium prices for underwhelming health care,” said D.J. Byrnes, a sports blogger from Columbus, in his 20s and uninsured. “If I want to buy something, I want to make sure it’s quality.”