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.