Obamacare: Penalizing Americans for Making a Choice!

Before I continue, I am not claiming the following as fact, it’s just my view of the situation.

In 2014; when the Affordable Care Act (ACA) comes into force, Americans will either have to buy health insurance or face a tax penalty. While the under 30s will effectively be penalized as they are the demographic that are likely to pay higher premiums to subsidize the ACA as insurers will no longer be able to deny people with pre-existing conditions which is commonplace in today’s market.

For example; if you are a family of four with an income of $35,000 per annum and no-one has medical insurance. In 2014, you will be penalized $285; which doesn’t sound like much. But in 2015 it will rise 242% to $975 and rise a further 114% in 2016 to $2,085, which is a serious financial hit.

Of course there are lots of exceptions which means a lot of Americans will not pay a tax penalty including people that fall into the following categories (which covers 98% of Americans):

1. You are covered by your employer.
2. You are covered by the government (Medicare, Medicaid, CHIP, TRICARE or the VA).
3. You have purchased coverage that meets the requirements for a Bronze plan under the ACA.
4. Your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income.
5. Your income is below the income tax filing threshold.
6. You were uninsured for less than three months of the year (If over three, penalty is pro-rated).
7. You qualify for a religious exclusion.
8. You are a member of a Native American tribe.
9. You are an undocumented immigrant.
10. You are in prison

In our personal situation; to insure our family, two adults and two children, it will cost almost $800 per month through the company my wife works for, which is about 35% of our total income before taxes. Medical insurance should not be as expensive as your rent, just rent and medical insurance comes to $1600; hence why we elected to only insure my wife because of pre-existing conditions while the kids are on Medicaid because we qualify as a low income family and I’m uninsured.

I know that President Obama went into this healthcare reform with good intentions, but what has come out at the other end is frankly an embarrassing joke, giving America an ultimatum of either buy health insurance or face hefty penalties at tax time. What next, penalties for choosing to buy a Japanese car instead of an American car? I feel this is a slippery slope for the US to go down!

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