Health Insurance – to buy or not to buy

Health Insurance? Not for 7.5 million people the IRS reported. CNBC has a great story about the IRS reporting 7.5 million taxpayers paid an average fine of $200. You can read the whole story here, “More Paid Obamacare Fines”. The story goes on to say that about 12 million people filed for an exemption from having to purchase health insurance.

Health Insurance Catch-22

I’ve helped several people who were exempt from purchasing health insurance for one reason or another but the biggest reason seems to be  they didn’t make enough money to receive a subsidy. The catch-22 works like this. If someone’s income falls below a floor, healthcare.gov determines that based on federal guidelines they should qualify for Medicaid. When that happens they’re automatically disqualified from receiving a subsidy. However, the state of South Dakota didn’t expand their Medicaid coverage. So more than likely they won’t receive Medicaid assistance. Someone who can’t get the tax credit and doesn’t qualify for Medicaid is now faced with a couple of bad options. Firsts, when they get their Eligibility Notice they’ll be given the option of buying catastrophic coverage. Which isn’t much of an option. Second, they’ll be given an exemption number use to when filing their tax returns. This way they won’t be fined for not being able to afford health insurance. Neither options is comforting for someone who needs health insurance.

An interesting note is that two weeks ago Healthline News ran a story titled “Why Some People Don’t Buy Health Insurance“. It divided the issue into two groups. People either not buying because of principles or money. They wrote that some people are resisting the mandate because they feel government has overstepped their boundaries. Others are simply comparing the cost of health insurance vs paying the fine. And some, like in the example above, don’t qualify for a tax credit and simply can’t afford it. No matter the reason, the bottom line is health insurance still isn’t affordable for everyone.