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Many Americans Opt to Skip
Health Insurance in 2016
According to the provisions of the Affordable Care Act, as of January 1,
2016, most
Americans are required to have health insurance or pay a penalty of
up to 2.5 percent
of their total household income to the IRS. Nonetheless, according to
Obama
administration sources, about 10.5 million adults who were eligible for
health
insurance coverage remained uninsured as of fall 2015.
Health Insurance in 2016
According to some of those who have chosen to pay the penalty
rather than purchase
health insurance, the decision makes financial sense. Susan Reardon, 61,
of
Kalamazoo, Michigan, for example, said in an interview with the NY
Times that after
calculating the cost of the cheapest plan available to her, which included
a $500
monthly premium and a $6,850 deductible, she was most likely going
to forgo health
insurance this year. Like many others, she believes it will be cheaper to pay
out of
pocket for her doctor visits and medications, even after paying the
approximately
$1,500 penalty.
And if something catastrophic occurs?
“I feel like it’s better just to die,” she said.
High Deductibles A Barrier to Health
Insurance
For many Americans, it seems that high deductibles rather than monthly
premiums
are the biggest obstacle to being insured. Said Tim Fescoe, a California
resident who
purchased health insurance on the state’s healthcare marketplace,
Covered California,
in 2014, “It literally covered zero medical expenses,” because the
policy included a
$6,000 deductible for both him and his wife. As a result, they opted to
drop their
insurance and pay the penalty in 2015.
The cost of going uninsured is going up this year, to $695 per adult family
member or
2.5 percent of the total household income, from $325 per adult or 2
percent of the
household income in 2015. Nonetheless, according to an analysis
by the Henry J.
Kaiser Family Foundation, about 7 million Americans would pay less in
penalties
than they would for the cheapest insurance available to them on the
federal health
insurance exchange. Furthermore, over half would not qualify for
subsidies because
their incomes are too high.
Going Without Health Insurance -- A
Big Risk
Going uninsured is a big gamble, however. According to the Health
Care Cost and
Utilization Project of the federal Agency for Healthcare Research and
Quality, there
were 36.5 million hospital stays in the United States in 2012, which
averaged four and
a half days and cost about $10,400 each. Nearly 50 percent of those
hospitalizations
involved Americans between the ages of 18 and 64 -- the demographic
that is most
likely to skip health insurance coverage in the hopes of staying
healthy.
What’s more, participation in the health insurance marketplace by the
majority of
Americans is a prerequisite for the long-term viability of the Affordable
Care Act ,
according to insurance industry experts. Younger, healthier people
offset the high cost
of caring for the sicker, older patients who have already signed up.
Whether higher penalties will encourage that increased
participation remains to be
seen. According to administration sources, about 2.5 million new
enrollees purchased
health insurance on the federal exchange since open enrollment
began on Nov. 1,
2015 -- a 29 percent increase over last year at this time.
Open enrollment for this year ends Jan. 31, 2016.
Health insurance decisions are complex and difficult, and making a
bad choice can
spell financial ruin for you and your family. So don’t try to navigate the
system alone.
Our health insurance experts will provide you with sound advice and
guide you
through the process. Just call us at 516-292-3780 any weekday between
9 a.m. and
6 p.m. ,or request a free consultation online now.
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