What will saying no to insurance cost?

Marketplace Staff Mar 26, 2010

What will saying no to insurance cost?

Marketplace Staff Mar 26, 2010


Tess Vigeland: So what happens if you decide you don’t want to take part in this new health care system? Well, you do have a choice — but it will cost you.

And here with us to talk about what happens if you opt-out is Marketplace’s Nancy Marshall Genzer, in our Washington bureau. Nancy, I said it’s gonna cost, so let’s hear the numbers. What will it cost to say no to health insurance?

Nancy Marshall Genzer: Well, at first it’ll cost you $95 or a percentage of your income, whichever is great. Now, the penalties rise pretty sharply for the next two years. So, by 2016, you’d be paying at least $695, or again, a percentage of your income, whichever is greater.

Vigeland: And any exceptions to this rule?

Marshall Genzer: Yes. If you earn so little that you don’t have to pay income taxes, you wouldn’t be penalized for not buying health insurance. You’re also excused from the penalty if you can’t find a health insurance policy that costs less than 8 percent of your income. Also, people with low incomes can get subsidies from the government to buy health insurance on those exchanges I just mentioned.

Vigeland: How will they know if you’ve joined an insurance plan or not?

Marshall Genzer: Well Tess, the IRS will know if you’ve been naughty or nice.

Vigeland: Uh oh.

Marshall Genzer: Yes. Insurance companies will automatically report your insurance coverage to the IRS, and the IRS will levy fines on the uninsured. But, but the IRS is prohibited from confiscating your assets or putting you in jail, because you don’t have insurance.

Vigeland: You know Nancy, these penalties actually seem pretty low, when you’re talking about $95 for a year, even $695 for a year. That can be a lot less than what you’re going to pay in premiums anyway. I wonder if experts think that that’s enough to make people sign up.

Marshall Genzer: Well, maybe not initially. And in fact Tess, I interviewed somebody who’s 25 years old, very healthy, and he says, hey, 95 bucks? He’s going to pay the penalty, initially, rather than going out and buying insurance. But remember those penalties do get higher, so eventually, people have more of an incentive to buy insurance.

Vigeland: Maybe this is an obvious question, but why would someone not want to have health insurance?

Marshall Genzer: Well, Tess, do you remember what it was like when you were 25? I thought I was invincible.

Vigeland: Right.

Marshall Genzer: So, like that guy I said I interviewed the other day, these young, healthy people never go to the doctor anyway. They say the penalty is less than they would pay for insurance, so they’ll go ahead and pay the penalty. He’s eliminated what he calls “risky behavior,” sold his motorcycle, doesn’t skateboard or travel abroad anymore. But, he says once the penalties get higher, he’s going to buy insurance. And he’ll get another motorcycle.

Vigeland: All right. Marketplace’s Nancy Marshall Genzer joining us. Thanks so much, Nancy.

Marshall Genzer: You’re welcome.

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