Don’t Tempt Fate Waiting for the ACA to Cover You

Some people are tempted to tempt fate by going without health insurance coverage until they get sick.

The provision in the Affordable Care Act (ACA) covering pre-existing conditions such as cancer and diabetes comes into effect on January 1, 2014. At this time, no one can be refused coverage or charged extra because of a pre-existing condition.

As a result, many people go without health insurance now, hoping they’ll stay well until 2014. And this decision may have devastating consequences.

For example, in the event of a severe accident, you may not be able to get coverage in place until after you’ve incurred thousands of dollars of medical expenses; your 2014 plan won’t help you with 2013 accidents.

Furthermore, the IRS assesses a penalty on anyone who does not have medical coverage in place in 2014. For the first year, that penalty is only $95 per adult and $47.50 per child, up to $285 for a family, or 1 percent of family income, whichever is greater.

But in 2015, it rises to $325 per adult, and $162.50 per child, up to $975 per family, or 2 percent of family income, whichever is greater. And it increases again in 2016, with a penalty of $695 per adult and $347.50 per child, or 2.5 percent of family income.

In the long run, going without health insurance does not save that much, and the chance of an injury such as a serious car crash introduces a devastating risk. Meanwhile, there are affordable solutions. Consult your advisor.