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Penalties instead of buying Obamacare

Any parent knows if the penalties or consequence of misbehavior is not high enough there is little deterrence. This concept, basic to any incentive program, was somehow missed by the legislature as they crafted Obamacare. Obamacare, which is expected to “go live” in October of this year, will penalize families and individuals who refuse to buy coverage, but many people have shrugged. Why? Because the penalties are not substantial enough to incentivize the actions the government so desperately needs to ensure Obamacare is successful.


What are the penalties for not buying Obamacare?


According to CNN, “For 2014, the penalty is either $95 per adult or 1% of family income, whichever results in a larger fine. (Income is defined as total income above the filing threshold, which is $10,000 for an individual and $20,000 for a family in 2013).”

Now without getting into the constitutional issue of whether or not the government really has the right to force Americans to buy insurance, the assessed penalties, at least for the first year, will be  a lot less than the premiums, which are estimated to be about $200 to $300 a month on average for a silver plan.

Here’s another example. If you are a person making $50,000 per year you won’t get a subsidy to buy insurance but your insurance policy will cost you approximately$2,400 to $3,600 a year in premiums. But what if you decide not to buy the plan? You will be subject to a $400 in penalties for the year.

Why are people opting out of paying for insurance coverage and paying the penalties instead?


The main reason individuals have decided to opt out purchasing insurance is because Obamacare does not allow insurance companies to deny coverage to individuals for preexisting conditions. Now this is the real kicker. Why bother getting insurance until you need it if you cannot ever be turned down for coverage? Why bother indeed. That is exactly what most individuals and families are asking themselves. Why bother buying anything and paying unnecessary premiums if there is no penalty for buying it later. Now that you mention it, I am starting to think I wish car insurance worked the same way; I would have saved myself thousands of dollars.

Other families are also arguing that they simply do not have the money. This might be true. There are millions of Americans currently out of work or living off disability benefits. Other workers consider themselves “young and healthy” and seldom go to the doctor for any medical conditions. What if these workers are involved in a serious accident or get a serious health condition? See reason number one. Additionally, these same workers argue they will take their chances. They’d rather not spend money each month for something they may not need.

Others refuse to sign up for Obamacare on strictly principled grounds. For instance, some workers don’t believe the government has the constitutional right to force Americans to purchase health insurance. Add to this the increased concern of the Federal Government collecting and consolidating health insurance records for millions of Americans and more and more people are saying, “No thanks.” Now that sounds like the best reason of all of them. Saying yes may reduce your penalties but at what cost?
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