What Will Obamacare Cost? IRS Estimates $20,000 Minimum A Year For Average Family
With the passage of the Affordable Health Care Act - or Obamacare - everyone will be mandated to buy health insurance or pay a tax to the Internal Revenue Service.
How much will this mandatory insurance cost the average family? Washington leaders have skirted the dollar and cents issue - but apparently the IRS isn't.
A new release from the IRS that's designed to help individuals determine what their tax penalty for not buying health insurance would be is estimating the minimum cost of yearly health care to be $20,000; That's the amount that Bronze-level insurance - or the lowest-level plan - would cost.
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.
This new release from the IRS matches with estimates that Forbes Magazine made in November of 2012. In that article, Forbes theorized that health plan coverage on the open market would be similar to what individuals currently would pay with COBRA and HIPPA insurance coverage.
To take an example, in Virginia CareFirst BlueCross charges $1978 per month for guaranteed issue coverage (with variations depending on the deductible the customer selects). An equivalent plan without guaranteed issue costs $333 per month. That’s a difference of $1645 per month, or almost $20,000 per year more. As it stands now, people with pre-existing conditions might find it worthwhile to pay that much, but others can get coverage at a much lower rate. But for 2014 and onwards, only the more expensive coverage will be available. This means that healthy families buying coverage on their own could see premium increases of $20,000 – a far cry from the decrease of $2500 promised by candidate Obama in 2008.
The IRS determines the tax the following way:
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 other words, if an individual is not provided health insurance from an employer, they will be mandated to obtain that coverage on their own; Failure to buy coverage will result in a tax penalty that is to be levied by the IRS. That