Some choose fines over coverage costs in Affordable Care Act

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FORT WAYNE, Ind. (WANE) – Sunday marked the deadline for signing up for healthcare coverage under the Affordable Care Act. The Obama administration said 7.1 million people have enrolled.

Those who didn’t sign up for care or don’t already have health insurance will now face fines for each month they aren’t insured. However, some people argue paying the fine makes more sense than facing a monthly premium and annual deductible. That includes Tracy Nash.

“I made this decision, way long time ago, earlier this year,” Nash said.

Nash isn’t alone in her decision. In July, federal researchers predicted around four million people, including dependents, could be hit with fines for not enrolling. Nash is a custodian at a high school, but said she can’t afford the insurance offered by her employer.

“It’s like I’m between a rock and a hard place,” Nash said.

After Tracy learned she made too much money to qualify for the state-offered insurance, or the Healthy Indiana Plan, she looked into coverage under the Affordable Care Act. The single mom of two decided the cost wasn’t worth it.

“Why should I pay $300 a month if I also have to pay $6,000 out-of-pocket before they pick it up? I’d rather pay the $325. The insurance companies need to lower the premiums, or at least the deductibles, that’s outrageous. Not too many people, you know, single moms, even single dads, or even families just starting out don’t have the $6000 extra with today’s economy and minimum wage not going up to pay us a little bit more. Everything else is going up but that,” Nash said.

Nash is referring to the monthly premium and the deductible people will pay for coverage under the Affordable Care Act. The maximum out-of-pocket costs for any plan is $6600 for an individual plan and $13,200 for a family plan. The monthly premium ranges anywhere from $100-600, depending on a number of factors like one’s income, number of children, and age. People can also apply for tax credits to lower the premium, depending on one’s annual income.Click here for ways to apply for lower premiums.

Many people are choosing to take the risk because of the way the fines are structured. The penalty is applied to a person’s taxable income:

  • $325 for a single adult
  • $162.50 per child
  • $925 maximum for a family or 2% of income- whichever total is higher.

There are also several ways to avoid paying the fee, including living abroad. Click here for a list of exemptions. 

The fine will be applied to people’s taxes this year. Click here for an overview.

The Obama administration’s goal is to have 9.1 million people signed up and paying their premiums this year.

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