Elimination of Affordable Care Act Mandate
Under the old law, the Affordable Care Act (ACA) required individuals, who were not covered by a health plan that provided at least minimum essential coverage, were required to pay a penalty with their Federal tax return.
Starting after December 31, 2018, the penalty is reduced to zero, and this repeal is made permanent. Thus, you aren’t required to have health insurance with the required minimum coverage. In fact, you aren’t even required to have health insurance, although I recommend that you do get good health coverage. Moreover, if you do get health insurance that doesn’t meet the minimum coverage requirements (as found on the health exchanges), you won’t be eligible for any subsidies.
Sandy’s elaboration: The point is with fewer people not being required to obtain coverage, more people would not meet the rules to obtain subsidized coverage since they would either drop out or obtain disqualifying coverage that doesn’t meet the minimum standards for the subsidy. The act does keep the 3.8% surcharge on net investment income for high income individuals and the .9% additional Medicare Tax, both enacted by the ACA.
In addition, the thinking is that the people who drop out will be the younger, healthier people who don’t think they need to keep this expensive coverage, which could significantly raise premiums much higher than they are now.
Thus, if you think your medical premiums are high now, wait a few years and see what happens when the healthier people drop out of the ACA. As Randy Bachman said, “You Ain’t Seen Nothing Yet.”
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