The Consumer’s Guide to the Affordable Care Act and Covered California

This is the first in a five part series…


The first thing to understand is that the Affordable Care Act and Obamacare are the same thing; they’re one and the thing.
Beginning in 2014, most people are required to have health insurance under the federal law. Financial assistance is available for those who qualify, and Medical is being expanded to cover more people, and will only be based on income.
These are reasons that people may not have health insurance. They might have pre-existing conditions, it’s not offered by their employer. Many people work for … have a job that don’t … that doesn’t offer health insurance, or it’s just simply unaffordable. Why are some reasons why it’s important to have health insurance? Because life is unpredictable. We never know what’s going to happen. We could walk out on the street, and a car could hit us, unfortunately. We don’t know what’s going to happen from moment to moment.

Medical care is expensive. For those of you that have had the unfortunate opportunity to have to stay in a hospital, you know how much those bills can get. They can be very expensive for medical care. Because health insurance does protect you financially … it protects you and your family financially. Also, health insurance covers a lot more than just injury or illness, and we’ll talk about that. Now, with the Affordable Care Act, health insurance is now affordable. Last but not least, it is the law.

Let’s talk about the average costs that you’d expect to pay for a couple different things that might happen to you or your family members, if you didn’t have health insurance. The average cost of a broken arm … so if you have a child, and they broke their arm … the average cost of a broken arm without health insurance is going to cost you almost $15,000. To deliver a baby nowadays, the average cost of pregnancy is over $18,000. And without insurance, the average cost of a hospital stay is over $33,000. These are all expenses that you will have to pay, if you don’t have health insurance.

Are you required to buy health insurance? Let’s determine if any of the following apply to you:

If your income is below the tax filing threshold, if you’re an undocumented immigrant, if insurance would cost more than eight percent of your income, or if you’re a member of an Indian tribe … if the answer to any of those questions is yes, then there is no penalty for being without health insurance.

For the most of us, that would answer no, the next question is, do you currently have health care coverage, or expect to have it in place by January 1st, 2014? That could include health insurance provided by your employer, or by your spouse’s employer, coverage that’s purchased in the individual market … it could be Medicare, Medical, Medicaid, or Tricare or Veterans’ health program.

If the answer to any of those questions is yes, then the requirement to have health insurance is satisfied. There’s no penalty that’s assessed. However, for the majority of us that might answer no that are on the Webinar today, there is a penalty for being without health insurance. The penalty in 2014 is one percent of your family income, or $95 per adult, whichever’s greater. If you earn, let’s say, $40,000 a year in your household, your penalty when you file your taxes in 2014 will be one percent, or $400.

That penalty increases in 2015 to two percent of your household income, so again if your income is $40,000 a year, in 2015 the penalty would be $800, for not having health insurance. And in 2016, that increases to 2 ½ percent of your family income, and that will increase even more in 2017 and beyond. There is a deadline, and you must enroll no later than March 31st of 2014 … this year … to avoid a tax penalty.

AUTHOR - Ali Nagy