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IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

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(CNSNews.com) – In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the IRS.

The IRS's assumption that the cheapest plan for a family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan.

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

Bronze will be the lowest tier health-insurance plan available under Obamacare--after Silver, Gold, and Platinum. Under the law, the penalty for not buying health insurance is supposed to be capped at either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family in 2016.

In the new final rules published Wednesday, IRS set in law the rules for implementing the penalty Americans must pay if they fail to obey Obamacare's mandate to buy insurance.

To help illustrate these rules, the IRS presented examples of different situations families might find themselves in.

In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.

Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a "penalty" (a word the IRS still uses despite the Supreme Court ruling that it is in fact a "tax") of $2,400 in 2016.

For those wondering how clear the IRS's clarifications of this new "penalty" rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

"(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

"(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 - $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

"(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

source

by on Feb. 1, 2013 at 1:44 PM
Replies (61-70):
Annsf
by Member on Feb. 2, 2013 at 11:57 AM
2 moms liked this

It is inhumane to write such incendiary material. I read it.  It does NOT say that it will cost $20,000.  Besides, ACA takes effect in 2014. Candlegal, go back to school to improve your reading.  You are being cruel to upset people who only want a right, affordable healthcare. BTW I have always had excellent health care and wish everyone had the same.

lga1965
by on Feb. 2, 2013 at 11:59 AM
1 mom liked this

 

Quoting toomanypoodles:

 

Quoting candlegal:

Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.

 We've paid out of pocket for the past three years for our medical care.  I don't see us getting any ins in the near future either.  I guess we'll pay the fine. 

 I certainly hope you can afford to pay 'out of pocket'for something serious such as major surgery and treatments and medications and follow-up visits and treatments if it should happen to you or your DH. It could add up to more than $100,000. My 11 year old grandson had a small cancerous tumor removed from his leg last fall and the total for the diagnostic tests including a P.E.T. test and an MRI, the surgery to remove the tumor and another surgery 2 weeks later  to remove part of his muscle tissue around the tumor area and more diagnostic tests, and a leg brace is close to $100,00 at this point and could be more. But they are aware of reality and  they have Health Insurance, thank goodness.Health Insurance is is necessity.

lga1965
by on Feb. 2, 2013 at 12:02 PM
1 mom liked this

 you rockYesssss !

Quoting Annsf:

It is inhumane to write such incendiary material. I read it.  It does NOT say that it will cost $20,000.  Besides, ACA takes effect in 2014. Candlegal, go back to school to improve your reading.  You are being cruel to upset people who only want a right, affordable healthcare. BTW I have always had excellent health care and wish everyone had the same.

 

fireangel5
by Gold Member on Feb. 2, 2013 at 2:08 PM

I'll be honest. I'm scared to see how this whole thing plays out. What kind of coverage I'l be able to afford, can I still use the Drs and hospital I use now, etc. I have oncologists, an eye doc, dentist and internist that I love and I don't want to have to go find all new drs because of this. The ultimate cost worries me also. 


Quoting LauraKW:

Your point is very sound. Another purpose of the ACA is to basically require that insurance plans provide a uniform base coverage. So that people don't buy one of those plans where they have to spend $10,000 before insurance covers anything.

Quoting fireangel5:


To be completely honest. it would depend on the coverage. If I have insurance in name only, I'm still shelling out a lot of $ for perscriptions, office visits, etc. 


Quoting katy_kay08:

A question for you.  If you could purchase insurance for $4,000 a year or pay a $2,400 tax for not having it which would you choose?  Is $4,000 a year for health insurance affordable?  (Based on another post you made this would be less than you are currently paying)

Would you choose to go without insurance?  

If you read the memo you would realize  that the memo doesn't actually say what the article claims and it certainly doesn't state that people will be paying $20K per year. 

Quoting Naturewoman4:

That's why Obamacare never made sense.  First of all, it doesn't take in affect till 2016.  Why?  I also, believe that a lot of people will just take the penalty.  So, what then does Obamacare accomplish?  When Obama first took office, he pledged to Americans that he will see to it that ALL OUR Healthcare will go down.  Yeah, sure.  He is just making sure that those that don't want to buy Ins. be responsible, don't have to.  That all us other 'responsible' taxpayers will cover theirs.   




Quoting candlegal:


Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.











LauraKW
by "Dude!" on Feb. 2, 2013 at 2:35 PM
I have great insurance and I don't anticipate anything changing with my great insurance. A lot of people mistakenly think that "Obamacare" is itself an insurance plan (not saying that you do). It isn't. It is, among other things, a set of standards that insurance plans have to meet - like providing mental health coverage, limiting or erasing pre-existing condition clauses, covering preventive care for men like prostate exams and for women like mammograms, and the list goes on. Things that insurance companies should already be covering but can now limit or charge extra for their plans to cover. This is only one aspect of the new law, there is a lot more to it - some good, some not so good, and most of it misunderstood.

Quoting fireangel5:

I'll be honest. I'm scared to see how this whole thing plays out. What kind of coverage I'l be able to afford, can I still use the Drs and hospital I use now, etc. I have oncologists, an eye doc, dentist and internist that I love and I don't want to have to go find all new drs because of this. The ultimate cost worries me also. 



Quoting LauraKW:

Your point is very sound. Another purpose of the ACA is to basically require that insurance plans provide a uniform base coverage. So that people don't buy one of those plans where they have to spend $10,000 before insurance covers anything.



Quoting fireangel5:


To be completely honest. it would depend on the coverage. If I have insurance in name only, I'm still shelling out a lot of $ for perscriptions, office visits, etc. 



Quoting katy_kay08:

A question for you.  If you could purchase insurance for $4,000 a year or pay a $2,400 tax for not having it which would you choose?  Is $4,000 a year for health insurance affordable?  (Based on another post you made this would be less than you are currently paying)

Would you choose to go without insurance?  

If you read the memo you would realize  that the memo doesn't actually say what the article claims and it certainly doesn't state that people will be paying $20K per year. 

Quoting Naturewoman4:

That's why Obamacare never made sense.  First of all, it doesn't take in affect till 2016.  Why?  I also, believe that a lot of people will just take the penalty.  So, what then does Obamacare accomplish?  When Obama first took office, he pledged to Americans that he will see to it that ALL OUR Healthcare will go down.  Yeah, sure.  He is just making sure that those that don't want to buy Ins. be responsible, don't have to.  That all us other 'responsible' taxpayers will cover theirs.   






Quoting candlegal:



Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.















Posted on the NEW CafeMom Mobile
moneysaver6
by Gold Member on Feb. 2, 2013 at 2:41 PM
And keep in mind that the $20K is not for free medical care. That's for the cheapest of the plans that offers the least amount of coverage for care that will still require payment.

Many are going to be shocked to finally see that required insurance coverage is NOT the same as free medical care for all.


Quoting Naturewoman4:

Thank-You for posting this Candle.  I just read it quickly & will come back & re-read it.  First, I don't understand why it takes till 2016 for Americans to get Ins.  That's 3 yrs. from now & in the meantime people are going to continue go to the ER for treatment.  Therefore, other people' premiums keep going up to cover for this. 


I just don't see a lot of people getting their Healthcare Ins.  still.  But, having to just pay alittle over $2K a yr., is not very much for a family.  Ours keep going up every yr.  What we pay is for 2 people.  It has gone up so much, that I will be having to take a p/t job, just to afford it.  At this time of my life I wasn't planning on doing so.  Especially, having to go back & do daycare. 


I wonder if my husband & I just dropped our Ins. & take the penalty what would happen?  Could we even to that?  $20K a yr. for Health Ins. through Obamacare is a lot of money!  I don't know how anyone that makes an average salary, can afford that. 

Posted on the NEW CafeMom Mobile
LauraKW
by "Dude!" on Feb. 2, 2013 at 2:43 PM
My son jumped off a 2nd floor balcony a couple of years ago and racked up a $20,000 bill in 3 hours: Life-flight alone was somewhere between $8,000 and $12,000. I don't remember exactly. With insurance we ended up paying around $1,200 total.

Quoting lga1965:

 


Quoting toomanypoodles:


 


Quoting candlegal:


Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.


 We've paid out of pocket for the past three years for our medical care.  I don't see us getting any ins in the near future either.  I guess we'll pay the fine. 


 I certainly hope you can afford to pay 'out of pocket'for something serious such as major surgery and treatments and medications and follow-up visits and treatments if it should happen to you or your DH. It could add up to more than $100,000. My 11 year old grandson had a small cancerous tumor removed from his leg last fall and the total for the diagnostic tests including a P.E.T. test and an MRI, the surgery to remove the tumor and another surgery 2 weeks later  to remove part of his muscle tissue around the tumor area and more diagnostic tests, and a leg brace is close to $100,00 at this point and could be more. But they are aware of reality and  they have Health Insurance, thank goodness.Health Insurance is is necessity.

Posted on the NEW CafeMom Mobile
lga1965
by on Feb. 2, 2013 at 2:47 PM

 Oh my goodness ! Is he okay now?Are you okay? I would have had a heart attack!

See---that is an excellent example of why we all need Health Insurance!

Quoting LauraKW:

My son jumped off a 2nd floor balcony a couple of years ago and racked up a $20,000 bill in 3 hours: Life-flight alone was somewhere between $8,000 and $12,000. I don't remember exactly. With insurance we ended up paying around $1,200 total.

Quoting lga1965:

 


Quoting toomanypoodles:


 


Quoting candlegal:


Don't worry, it will be cheaper for everyone to pay the fine and not worry about having insurance.


 We've paid out of pocket for the past three years for our medical care.  I don't see us getting any ins in the near future either.  I guess we'll pay the fine. 


 I certainly hope you can afford to pay 'out of pocket'for something serious such as major surgery and treatments and medications and follow-up visits and treatments if it should happen to you or your DH. It could add up to more than $100,000. My 11 year old grandson had a small cancerous tumor removed from his leg last fall and the total for the diagnostic tests including a P.E.T. test and an MRI, the surgery to remove the tumor and another surgery 2 weeks later  to remove part of his muscle tissue around the tumor area and more diagnostic tests, and a leg brace is close to $100,00 at this point and could be more. But they are aware of reality and  they have Health Insurance, thank goodness.Health Insurance is is necessity.

 

LauraKW
by "Dude!" on Feb. 2, 2013 at 2:47 PM
No, the article is intentionally misleading. The $20,000 number is referring to those people who can't afford an insurance plan, it has nothing to do with the actual cost of an insurance plan. The article is meant to confuse and scare people, and is having just that effect. It is NOT factual.

Quoting moneysaver6:

And keep in mind that the $20K is not for free medical care. That's for the cheapest of the plans that offers the least amount of coverage for care that will still require payment.



Many are going to be shocked to finally see that required insurance coverage is NOT the same as free medical care for all.




Quoting Naturewoman4:

Thank-You for posting this Candle.  I just read it quickly & will come back & re-read it.  First, I don't understand why it takes till 2016 for Americans to get Ins.  That's 3 yrs. from now & in the meantime people are going to continue go to the ER for treatment.  Therefore, other people' premiums keep going up to cover for this. 



I just don't see a lot of people getting their Healthcare Ins.  still.  But, having to just pay alittle over $2K a yr., is not very much for a family.  Ours keep going up every yr.  What we pay is for 2 people.  It has gone up so much, that I will be having to take a p/t job, just to afford it.  At this time of my life I wasn't planning on doing so.  Especially, having to go back & do daycare. 



I wonder if my husband & I just dropped our Ins. & take the penalty what would happen?  Could we even to that?  $20K a yr. for Health Ins. through Obamacare is a lot of money!  I don't know how anyone that makes an average salary, can afford that. 

Posted on the NEW CafeMom Mobile
stacymomof2
by Ruby Member on Feb. 2, 2013 at 2:54 PM

What are you talking about?  The 20 grand is a made up number, not an actual number charged to people.  

This OP is intentionally misleading, however if you read the article you can see what it is talking about.  How would the IRS know how much your insurance will be?  They are in the tax business.  They don't provide insurance.

Quoting moneysaver6:

And keep in mind that the $20K is not for free medical care. That's for the cheapest of the plans that offers the least amount of coverage for care that will still require payment.

Many are going to be shocked to finally see that required insurance coverage is NOT the same as free medical care for all.


Quoting Naturewoman4:

Thank-You for posting this Candle.  I just read it quickly & will come back & re-read it.  First, I don't understand why it takes till 2016 for Americans to get Ins.  That's 3 yrs. from now & in the meantime people are going to continue go to the ER for treatment.  Therefore, other people' premiums keep going up to cover for this. 


I just don't see a lot of people getting their Healthcare Ins.  still.  But, having to just pay alittle over $2K a yr., is not very much for a family.  Ours keep going up every yr.  What we pay is for 2 people.  It has gone up so much, that I will be having to take a p/t job, just to afford it.  At this time of my life I wasn't planning on doing so.  Especially, having to go back & do daycare. 


I wonder if my husband & I just dropped our Ins. & take the penalty what would happen?  Could we even to that?  $20K a yr. for Health Ins. through Obamacare is a lot of money!  I don't know how anyone that makes an average salary, can afford that. 


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