Thread: IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family

January 31, 2013
By Matt Cover

President Barack Obama hugs HHS Secretary Kathleen Sebelius and then-House Speaker Nancy Pelosi after signing the Obamacare law on March 23, 2010. (White House photo/Pete Souza)

(CNSNews.com) – In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the IRS.

The IRS's assumption that the cheapest plan for 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.

The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan.

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation says.

Bronze will be the lowest tier health-insurance plan available under Obamacare--after Silver, Gold, and Platinum. 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 the new final rules published Wednesday, IRS set in law the rules for implementing the penalty Americans must pay if they fail to obey Obamacare's mandate to buy insurance.

To help illustrate these rules, the IRS presented examples of different situations families might find themselves in.

In the examples, the IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016.
Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a "penalty" (a word the IRS still uses despite the Supreme Court ruling that it is in fact a "tax") of $2,400 in 2016.

For those wondering how clear the IRS's clarifications of this new "penalty" rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

"(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

"(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 - $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

"(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family | CNS News

Please tell me this isn't true. $20k a year comes to $1666 a month! If thats the case then my family will lose everything we've worked for and we will be on the streets!!!!! There is NO WAY we can afford this.
We pay $290 a month now for the rock bottom crappy health insurance with a $6K deductable for single and a $20k deductable for family. This is for insurance that we NEVER use.
I have no idea what planet this POS president thinks he is on. May he burn in hell.

And the federal government is subsidizing all but the wealthiest buyers.

http://www.alipac.us/f12/few-may-pay...s-show-271755/

Originally Posted by SicNTiredInSoCal

Please tell me this isn't true. $20k a year comes to $1666 a month! If thats the case then my family will lose everything we've worked for and we will be on the streets!!!!! There is NO WAY we can afford this.
We pay $290 a month now for the rock bottom crappy health insurance with a $6K deductable for single and a $20k deductable for family. This is for insurance that we NEVER use.
I have no idea what planet this POS president thinks he is on. May he burn in hell.

You already have a health care policy so you don't have to buy anything else.

So if you dont have a health care policy, you have to pay 20k minimum per year or face fines? I hope this is not accurate. If it is, a lot of people are going to be really shocked.

W

Originally Posted by ALIPAC

So if you dont have a health care policy, you have to pay 20k minimum per year or face fines? I hope this is not accurate. If it is, a lot of people are going to be really shocked.

W

the federal government is subsidizing all but the wealthiest buyers.

Few may pay for skipping health insurance, new regs show
(Read the info over here.)

. . . The regulations make it clear there are plenty of exemptions. For instance, people who live in a state that has decided against expanding Medicaid won’t have to pay the tax if they would have been eligible for Medicaid.

So, if people live in a state that isn’t expanding Medicaid, they might not be on the hook to buy health insurance for themselves, although the government recommends they do. . .

People are exempt if they are in jail or prison, if they make too little money to file an income tax return ($9,500 a year for an individual), if their health insurance premium would cost them more than 8 percent of annual income, members of Indian tribes, those whose religion forbids buying health insurance, illegal immigrants, Americans living abroad, and members of a health care sharing ministry. . .

http://www.alipac.us/f12/few-may-pay...s-show-271755/