The Department of Health and Human Services Secretary, Kathleen Sebelius, indicated while on Capitol about ten days ago, that the administration would not extend the individual mandate. With that announcement, what would it mean to someone who does not enroll in health insurance by March 31st?
You are at risk for a financial calamity. What happens if your suddenly become ill and have to be admitted to the hospital? You are on your own. $20,000, $50,000 or maybe even $100,000 in medical bills could be yours to pay without any help from an insurance company. What would happen if you would die as a result? What would your family do with these bills and without your income to pay for them?
Your health expenses may be more expensive in the future. One of the items covered 100% on Affordable Care Act (Obamacare) compliant plans are preventative care. Pap smears, mammograms and other screening tests designed to find problems early – when they are less expensive to treat. Without a plan to pay those for preventative care, it is much more likely that your condition will be diagnosed later, meaning more adverse health effects and more expensive treatment to pay for. You have heard the saying “Past performance is not a guarantee of future performance”. Just because you are healthy now, does not mean you will be healthy forever.
You will have to pay a penalty. It has been widely reported that you only have to pay a $95.00 penalty if you do not have coverage. This is not correct. For many individuals, the penalty will be much higher. Forbes.com has a great penalty calculator you can access here. For many, the penalty will be hundreds of dollars to more than a thousand. The Tax Policy Center also has a great calculator on their website. Paying the penalty does not get you any coverage.
Enrollment options will be limited. After March 31, you must have an SEP (special enrollment period) to enroll in coverage. If you do not have one of the qualifying events, you will not be able to enroll in coverage until January 1, 2014 at the earliest. You will have to provide the carrier documentation of the event that qualifies you to enroll. Most events allowing enrollment require loss of Minimum Essential Coverage. If you don’t have that coverage by March 31, you may not be able to enroll.