February 6, 2013
A new IRS regulation states that the least expensive
health insurance plan available under ObamaCare will cost the average family $20,000 per year in 2016.
IRS Says Newberry Springs Families
Will Pay at Least
$20,000 a Year for ObamaCare
Written by Michael Tennant
Reprint from The New American
Twenty thousand dollars. That's how much the Internal Revenue Service (IRS)
estimates the least expensive health insurance plan available under ObamaCare will cost the average
family in 2016.
The IRS issued a 73-page final regulation on January 30 to "provide
guidance on the liability for the shared responsibility payment for not maintaining minimum
essential coverage." In other words, the agency was telling Americans what insurance they
must have in order to avoid paying the penalty for noncompliance with the law - and what that
penalty will be if they fail to comply.
Under ObamaCare, individuals not obtaining health coverage through their
employers must purchase government-approved insurance on state exchanges. There will be four
tiers of coverage: bronze, silver, gold, and platinum. Bronze is the lowest tier and
therefore the least expensive.
Failure to purchase insurance will result in a tax penalty "capped at
either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family
in 2016," according to CNSNews.com.
Buried in the examples of how to calculate the penalty under different
scenarios is this revelation: "The annual national average bronze plan premium for a family
of 5 (2 adults, 3 children) is $20,000." (The IRS also assumes this is the cost for a family
The median household income in the United States at the end of 2011 was
$50,054 and falling. For a family of five with that income, the cheapest health insurance
available under ObamaCare will consume 40 percent of their earnings. The penalty for not
having insurance will be far lower, giving these families a major incentive not to buy insurance
until they need it - one of the things ObamaCare was supposed to prevent.
Even for wealthier families, the penalty will be minuscule compared to
the cost of coverage. The IRS offers an example of a family consisting of two married adults
with three children - ages 21, 15, and 10 - and an income of $120,000 per year. Assuming
the couple files jointly, their penalty for failing to insure even one member of their family
during the previous year will be $2,400, just 12 percent of the cost of the bronze insurance
plan. Again, why not wait until insurance is needed to buy it? They can't be turned
down or charged more for coverage because of pre-existing conditions, and in the meantime
they can rely on federal law requiring emergency rooms to treat all patients regardless of
their ability to pay.
It's worth noting that the law requires employers with 50 or more
employees to offer "affordable" coverage, with "affordable" defined as costing an employee
no more than 9.5 percent of his total household income. Under that definition, a family
of four would have to earn $210,527 a year for the Washington-approved bronze plan to be
deemed affordable for them. Clearly the federal government is not holding itself to
the same standards to which it holds employers.
President Barack Obama promised that his healthcare law would "bring
down premiums by $2,500 for the typical family." John R. Lott, Jr. notes that
"in 2012, the average price for insurance for a family of four was $15,745." If the
IRS's projections for 2016 are correct, that family's premiums are going to increase by
almost double the amount by which Obama said they would decrease.
No matter how you slice it, the Affordable Care Act is becoming
less affordable every day.
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