It was easy for many to blow off health insurance when it first became required by law under the Obama health care law in 2014. After all, the minimum fine (or tax, if you like) for ignoring the individual mandate was a mere $95 per adult back then, to a family maximum of $285.
Even in 2015, the $325 minimum penalty per adult and $975 family cap seemed better to some than forking over for a bronze Obamacare plan, the least expensive qualifying coverage to avoid that ding on your federal income tax.
But 2016 is different. In 2016, the screw tightens considerably, and the financial case for remaining uninsured starts to creak and wobble. Because if you don't have health insurance next year, it's going to cost you a minimum of $695 per adult, $347.50 for every uninsured child under 18, and a whopping $2,085 maximum per family.
Is it worth it now? Does it still make sense to tempt fate? To paraphrase Dirty Harry, are you feeling lucky, punk?
Average penalty will approach $1,000
A new analysis by the Kaiser Family Foundation finds that the average penalty for all uninsured households that are eligible for an Obamacare exchange policy will hit $969 next year, a 47% increase over the estimated $661 average household penalty for 2015. (And remember, the penalty is due when you file your taxes for the year in question.)
Those households that would qualify for an exchange subsidy are looking at an average fine of $738 per household for 2016, while those who make too much to warrant subsidy help will face an estimated average fine of $1,450, according to Kaiser.
The takeaway? Of the 7.1 million uninsured who are eligible for marketplace subsidies, almost half, or 3.5 million, would qualify for either $0 in bronze plan premiums or sufficient subsidy help that would make it cheaper to buy health insurance than pay the fine.
But do you really want a bronze plan?
That said, bronze plans aren't necessarily the right move for every household. Part of the reason they're at the low-cost end of the metal plans is because they typically feature higher deductibles and cost-sharing. Some low-income enrollees might fare better financially by choosing a silver plan with a higher premium that offers cost-sharing subsidies to help with deductibles and the like.
Kaiser's analysts suggest that 2016 may be the tipping point in which America's remaining uninsured think twice about obtaining health coverage.
"Increasing enrollment in the ACA's health insurance marketplaces would help to reduce the number of people uninsured and keep premium increases down as more healthy people sign up," the study concludes. "Premium subsidies are an important 'carrot' to attract new enrollees. As penalties grow in 2016, the 'stick' of the individual mandate may also become an increasingly significant factor in the household decisions about whether to buy insurance."
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