Friday, January 10, 2014

Rizzo's Ramblings.....Public Service Announcement

The other day I posted a public service announcement concerning the ACA and the tax penalty one could incur for being without insurance for more than 3 months. I posted the information to try to quell confusion about when the penalty would go into effect. People (like myself) who will have to pay the penalty, either by choice or by circumstance, need to be clear so some unscrupulous tax preparer doesn't get it wrong. The penalty will go into effect next tax season, if you do not have insurance for more than 3 months during the year of 2014.
My husband and I will be paying the penalty. Our incomes combined are less than $25,000. When I first visited the government website there was only a questionnaire because it was before the marketplace went live. According to the questionnaire, my husband and I should have qualified for Medicaid. The questionnaire had a list of states that had decided to expand their Medicaid programs to include some people who may not have been eligible before. My state was not one of them, so Medicaid was out of the question.
*Note: In the state of Virginia, a single parent of a child who is eligible for Medicaid is also eligible. My husband and I cannot get Medicaid because we are married.
The questionnaire also mentioned that a person who qualifies for Medicaid may not be eligible for subsidies. So, for a long time I was afraid I would be too poor to be able to get a subsidy so I would have to pay a fine. Which is dumb. The reality is that people are facing that scenario. Instead, after they fixed the website, I found out that I do qualify for a subsidy. About $600 a month. The site explained that I would receive that money as a tax credit at the end of the year. It would off set any thing I owed (tax wise), and then I would receive the balance. It also explained that I could use part (or all) of that towards my insurance premium. The site advised that I not use the whole amount because I might have to pay part of it back at the end of the year. The way they figure the subsidy is based on the financial information you supply. You are giving them an estimate of what you think you will make. If you make more than you estimate, you will qualify for a smaller subsidy, which will result in you owing the IRS.
After I read all of that, I went and browsed insurance policies. Here is what I found. If I used the whole $600 a month subsidy, then I could get a bare bones policy that would only cost me about $30 a month. The policy had a $12,000 deductible! I would be paying for an insurance policy that would do me no good. If I had $12,000 to spend on doctor bills I would not need insurance! Oh! And let me not forget that after I met the $12,000 deductible, the insurance only paid sixty percent! I could get a decent policy with only a $400 deductible, but it would take the whole subsidy plus $250 a month. I don't have that, either.
So, we will be paying the penalty. Not because we want to, but because it is the only thing that is financially feasible. I can't wait to go to the doctor and tell them I don't have any insurance. If I thought it was bad before... People are really going to be jerks now. 

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