No health insurance tax penalty

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LiterallyIronic
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Re: No health insurance tax penalty

Post by LiterallyIronic »

michaeljc70 wrote:
LiterallyIronic wrote:
bottlecap wrote:My actual real-life experience as recently as the last few months has been Dr. charges $220, insurance negotiates down to $120. Next visit my wife says, we dropped insurance, receptionist says then it will be $67.

No negotiatation. Doctor only wants $67. But with insurance, insurance gets your $1,000 monthly premium, Dr. gets $120. Win-win for everyone but you.

JT

P.S. Wife says it was $59, not $67. More than half price. And we didn't have to wait 3 months to find out what it would cost.
This has been my experience, too. I have health insurance through my work. But when I go to a doctor, I always tell them I don't have health insurance. They always chop the price big-time. If I happen to use the hospital network, they will even tack on a 40% discount if I pay that day. Some day, something horrific might happen to me, and that's the day I'll say I have health insurance, the $25,000 medical procedure. But if it's for a $80 ear irrigation, for example, I'm paying cash.
What if the doctor orders tests? Lab work? I had a routine physical and the lab work was over $1000 (billed rate). If the doctor says you need a test do you take out your cell, ask him what lab he uses, call them and try to negotiate?
Frankly, if the doctor said I needed some kind of a test, the first thing I would do is ask how much it would cost. If the doctor has to make some phone calls to find out, so be it, but we're not doing the test until I know the price.
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bottlecap
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Location: Tennessee

Re: No health insurance tax penalty

Post by bottlecap »

LiterallyIronic wrote: This has been my experience, too. I have health insurance through my work. But when I go to a doctor, I always tell them I don't have health insurance. They always chop the price big-time. If I happen to use the hospital network, they will even tack on a 40% discount if I pay that day. Some day, something horrific might happen to me, and that's the day I'll say I have health insurance, the $25,000 medical procedure. But if it's for a $80 ear irrigation, for example, I'm paying cash.
The wife and I were discussing this strategy. We are going to adopt it. That way only the insurance is expensive.
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bottlecap
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Re: No health insurance tax penalty

Post by bottlecap »

michaeljc70 wrote:As far as bets go, medical expenses is the number one cause of bankruptcy in the US.
If you think this is relevant to your decision, please know this is not true. I used to practice bankruptcy. Never saw one "due" to medical expenses.

Now, I'm sure they happen, but because on my (opposite) experience, I looked into this claim. The assumptions made by those who claim this are fanciful at best. If you look into this claim, I would also remind you to consider the source. You will know what I mean.

JT
michaeljc70
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Re: No health insurance tax penalty

Post by michaeljc70 »

bottlecap wrote:
michaeljc70 wrote:As far as bets go, medical expenses is the number one cause of bankruptcy in the US.
If you think this is relevant to your decision, please know this is not true. I used to practice bankruptcy. Never saw one "due" to medical expenses.

Now, I'm sure they happen, but because on my (opposite) experience, I looked into this claim. The assumptions made by those who claim this are fanciful at best. If you look into this claim, I would also remind you to consider the source. You will know what I mean.

JT
You are providing anectodotal evidence and shaming a Harvard study as a bad source?
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bottlecap
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Re: No health insurance tax penalty

Post by bottlecap »

michaeljc70 wrote:
bottlecap wrote:
michaeljc70 wrote:As far as bets go, medical expenses is the number one cause of bankruptcy in the US.
If you think this is relevant to your decision, please know this is not true. I used to practice bankruptcy. Never saw one "due" to medical expenses.

Now, I'm sure they happen, but because on my (opposite) experience, I looked into this claim. The assumptions made by those who claim this are fanciful at best. If you look into this claim, I would also remind you to consider the source. You will know what I mean.

JT
You are providing anectodotal evidence and shaming a Harvard study as a bad source?
Not exactly anecdotal. If it were the number one cause of bankruptcy, you'd think I'd have seen at least one over the years.

And yes, the "Harvard" study authored by a leading proponent of single payer health care, who is now a senator from Massachusetts, and which uses as its biggest source another one of her "studies" is a very bad source.

If you read these "studies" and truly think that the methodology was anything other an effort to produce a single conclusion, then I can't help you. However, I'm happy to discuss the problems with the methodology via PM if you have questions as to why the methodology was less than amateurish.

JT
covertfantom
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Re: No health insurance tax penalty

Post by covertfantom »

bottlecap wrote:
michaeljc70 wrote:As far as bets go, medical expenses is the number one cause of bankruptcy in the US.
If you think this is relevant to your decision, please know this is not true. I used to practice bankruptcy. Never saw one "due" to medical expenses.

Now, I'm sure they happen, but because on my (opposite) experience, I looked into this claim. The assumptions made by those who claim this are fanciful at best. If you look into this claim, I would also remind you to consider the source. You will know what I mean.

JT
I could be wrong... but if I were bankrupt in a hospital bed with a stack of bills... I'm not sure I'm hiring an attorney. I'm not sure what the point would be. Thoughts?
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mattwall45
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Re: No health insurance tax penalty

Post by mattwall45 »

My post has been hijacked :(
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bottlecap
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Location: Tennessee

Re: No health insurance tax penalty

Post by bottlecap »

mattwall45 wrote:My post has been hijacked :(
Sorry. I was trying to point out that you might not be so dumb (as you mentioned in your first post) to have gone without health insurance, but there are always those who will say you need coverage no matter how great the cost.

The bottom line is you have until January 31 to get covered by March 1. Miss that and you are locked out of the market until next March 1, unless you get a new job with insurance.

I think you can go without health insurance for 2 or 3 months per year without incurring a penalty and that the penalty is prorated on a monthly basis. I don't think you will be on the hook for the last few months this year and the first few months next year. If you are penalized for any period, it will only be for the months you are uninsured over the "grace" period.

Good luck,

JT
jfave33
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Re: No health insurance tax penalty

Post by jfave33 »

I think you can get coverage pretty much anywhere and have it apply right away. Even the ACA marketplace is still in open enrollment up to the end of the month.

For those who don't have insurance because it is too expensive I would at least consider a health sharing ministry as the risk of one of those versus nothing is a lot less. They usually cost a lot less than insurance. www.Libertyhealthshare.org doesn't require one to be a practicing Christian.
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celia
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Re: No health insurance tax penalty

Post by celia »

mattwall45 wrote:So to be clear, I'm not debating insurance or healthcare cost. I just need advice on how to deal with my situation regarding the tax penalty and the cheapest insurance that will pay for any catastrophe.
Call up the insurance company you last used and ask for an individual/family quote. You don't have to be a member of any employer group or use ACA. This will be your baseline quote in case you don't get any other.

Since I think Blue Cross/ Blue Shield and Kaiser are the biggest carriers, also call them for comparison. If you go with an HMO it will be a lot cheaper than a PPO, but you will have to get services in the network.
montanagirl
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Re: No health insurance tax penalty

Post by montanagirl »

lazydavid wrote:
montanagirl wrote:That's not right. It is added to total tax liability on line 61 of the 1040.
While this is technically true--it does go on the form--it's only a liability if you actually have to pay it. And you don't. See here:

https://www.healthcare.gov/fees/fee-for ... g-covered/
What happens if I don't pay the fee?

The IRS will hold back the amount of the fee from any future tax refunds. There are no liens, levies, or criminal penalties for failing to pay the fee.
That's what I mean about it not being a tax liability. It's a fee that gets added in with some other tax liabilities. But unlike actual taxes, it doesn't trigger an audit or jail sentence when you refuse to pay. If line 74 says you owe $800, and $500 of that is on line 61, include a check for $300 with your return and you're done.

So, how does the IRS know you're paying one part of the liability but not the other? They could apply the $500 to the ACA penalty and come at you for the balance.
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Phineas J. Whoopee
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Re: No health insurance tax penalty

Post by Phineas J. Whoopee »

montanagirl wrote:...
So, how does the IRS know you're paying one part of the liability but not the other? They could apply the $500 to the ACA penalty and come at you for the balance.
The way the law works in practice is money applies first to income tax, any penalty, any interest, any excise tax, all of which you can be pursued for, and last to the shared responsibility payment, for which Congress wrote into the law there is no pursuit of, other than from any future federal tax refund.

The fact that Congress specified less vigorous enforcement does not change the fact that one owes all of one's taxes, and that the right way to protest is not to evade them but to use the political process to change them.

To refer to an old analogy, your car might not destroy its engine just because you exceed the speed limit, but that doesn't change the fact there is a speed limit in the first place.

PJW
JGoneRiding
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Re: No health insurance tax penalty

Post by JGoneRiding »

mattwall45 wrote:
Is this possible? This would save me some $. After review I might have gone 3 months not 2 and be on the hook for the max penalty in taxes for 2016. Yes I'm an idiot :oops:
Having paid the penalty because of getting married for 2015 i can assure you its not quite that bad. (I mean it really sucked to pay 1800 fine because my new husband didnt understand how my income affected his health care fine but he had no coverage most of the year) the fine is calculated per month. So you do get some credit for having some coverage

Lets say you are a family of 1 (i really hope so or you might in fact pay the max) then the max penalty is the lowest avilable certain medal plan federal not to exceed x%of income (i think 2.5 but cant remember this year) i belive its the silver. Lets say that cost is 2200 for a person of your age. Then you pay that divided by 12 for the months you did not have coverage its complicated but not as bad as i think you are picturing. Quick input into turbo tax etc should tell you if it is better to retro activate cobara or pay penalty since it isnt like you are going to regain coverage for last year

In your shoes i would sign up asap on your state exchange and try to get covered starting for feb.
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Epsilon Delta
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Re: No health insurance tax penalty

Post by Epsilon Delta »

JGoneRiding wrote:
In your shoes i would sign up asap on your state exchange and try to get covered starting for feb.
As I understand it if you sign up after the 15th coverage is delayed one month, so if you sign up now coverage will start on March 1st. I believe there is an exception if you have continuous coverage (which does not apply to the OP). There may be other exceptions, or particular insurance companies with different rules, but I'd say starting on Feb 1st is a long shot.
Katietsu
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Re: No health insurance tax penalty

Post by Katietsu »

To the OP, if you are a 31 year old single person, I do not see how your penalty for January will be $1000. For 2016, your maximum penalty would be $223 a month for an individual. It will be somewhat higher in 2017 but not 4x higher. Are there other family members to consider?
michaeljc70
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Re: No health insurance tax penalty

Post by michaeljc70 »

Epsilon Delta wrote:
JGoneRiding wrote:
In your shoes i would sign up asap on your state exchange and try to get covered starting for feb.
As I understand it if you sign up after the 15th coverage is delayed one month, so if you sign up now coverage will start on March 1st. I believe there is an exception if you have continuous coverage (which does not apply to the OP). There may be other exceptions, or particular insurance companies with different rules, but I'd say starting on Feb 1st is a long shot.
If you dont sign up by Jan 31 you will not be able to sign up unless you meet one of the exceptions. The open enrollment period was created to keep people from just signing up when they got sick.
Topic Author
mattwall45
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Re: No health insurance tax penalty

Post by mattwall45 »

Katietsu wrote:To the OP, if you are a 31 year old single person, I do not see how your penalty for January will be $1000. For 2016, your maximum penalty would be $223 a month for an individual. It will be somewhat higher in 2017 but not 4x higher. Are there other family members to consider?

Now that I review it, you are correct. I think I just saw the 2.5% with a max of over 2k and lost all ability to reason. I just got under my desk in the fetal position and cried. It's not an astronomical number, but to read that a mistake you made will cost 2k hurts a bit after working so hard to build up my savings. I think somewhere along the line I also read the max was 12k for some reason. Maybe that was regarding a large family. I am a single adult.
montanagirl
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Re: No health insurance tax penalty

Post by montanagirl »

The penalty is 2.5℅ of income over filing threshold or $695, whichever is more.
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mattwall45
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Re: No health insurance tax penalty

Post by mattwall45 »

montanagirl wrote:The penalty is 2.5℅ of income over filing threshold or $695, whichever is more.


Luckily with a maximum. I mentioned the hourly rate for someone in my field in a prior post. 2.5% is easily $3750 for that and I've been working OT with incentives as mentioned before.
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Tamarind
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Re: No health insurance tax penalty

Post by Tamarind »

So, OP, have you found insurance? Midnight tonight is your deadline or you really will be paying the whole year penalty unless you have a qualifying event like changing jobs again.
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