Health Insurance Articles
A Look At The Penalties of No Health Insurance Coverage
2010-06-29
Currently, it's up to the individual to choose whether or not to carry health insurance. Most people have coverage through their employers for themselves or their families. Self-employed workers usually have their own individual coverage. They might also belong to a group that has a good health insurance plan, such as a union or social group. Lower-income people have the option of federal or state-assisted healthcare plans. Some people fall through the cracks, being unable to afford insurance through no fault of their own. Others simply don't bother or don't care to spend the money for coverage. They use emergency rooms for primary care physicians. But most people aren't aware of the health insurance penalties that can occur from break in coverage, so it may be reasonable to look for health insurance coverage quotes.
President Barrack Obama's new healthcare reform plan effectively outlaws lack of insurance. Because the insurance companies will be forced to cover preexisting conditions, every person who can afford insurance will be mandated to buy it. This surge in new business is meant to offset the extra expense the insurance companies will assume when they drop their preexisting condition exclusions.
For those who ignore the mandate, there will be health insurance penalties, which are being referred to as taxes. These penalties are meant to keep people from cheating on their insurance by only buying it when they need it.
Depending on whether the House or Senate plan is passed, the penalty will vary in amount and method of assessment. The Senate bill would phase in fines beginning in 2014 with the fine increasing to $750 by 2017. The House bill would have the IRS charge 2.5 percent of an individual's taxable income up to the cost of a standard health care plan. Since the fines would be collected as part of income taxes, to not pay the fines would be a failure to pay taxes, which is a serious crime.
There will be ample exemptions for individuals suffering financial hardship, as well as a newly recharged Medicare system for those who cannot afford coverage. The distinction between the criminal and the hardship case is not only financial inability, but also intent. A person who has a limited income or no income at all has no way to pay for insurance. Another person who can afford but chooses to not carry insurance is trying to cheat the system. The penalties are meant to penalize the guilty, not the poor. Healthcare reform must be fair if it is to be successful. It cannot be fair if those who can afford it decide against contributing their fair share. Searching different health insurance coverage quotes may then be necessary.
