Skip to comments.IRS: Cheapest Obamacare Plan Will Be $20,000 Per Family
Posted on 01/31/2013 2:43:47 PM PST by rhema
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 of five 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 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 Js household income is $120,000. H and Js 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).
This looks interesting but I have no clue what your comparison is revealing here. What are you comparing again and what is it supposed to reveal?
So the $20K this article asserts is B.S.?
“My understanding is subsidies for poor will be about 16,000. So if you make 20,000 per year, you may get the 20,000 plan for a few hundred bucks a year.”
If you make 20,000 now (that is a figure that people in my area used to dream of making in FIVE years when I was a boy) you don’t have a few hundred so it is far from free and what people get for that will hardly merit the name of healthcare, they will probably be trying to find a veterinarian who will treat them in the hope of a better outcome than they will have under Obamacare.
“So the $20K this article asserts is B.S.?” Pretty much. To the IRS, the actual premium is 20K, BUT...they then go on with typical loopy IRS math to divide this by that minus the other to arrive at the actual payment, $2600. This is actually in the article.
Now, one question is, does someone else (taxpayers) pay the balance?
Ahh, that number is a bit harder to pull-out of the ether(net)... U.S.A. Today has this to say about it:
Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.
However, they go on to add that "These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis."
So, when I add that up, I see that federal workers receive about $108476 in salaries and benefits compared to similar private workers at only $69928. Since this compares only private/public jobs which are similar, it's hard to know exactly what real difference this has on the "median" income but clearly, as you suggested, the "public sector" definitely pulls the median upward.
One other article at Reason.org states that "state and local government employees earned total compensation of $39.60 an hour, compared to $27.42 an hour for private industry workers-a difference of over 44 percent."
Two more bits of info that may apply comes from www.cbo.gov" states that "The federal government employs about 2.3 million civilian workers1.7 percent of the U.S. workforce", and from www.brookings.edu that indicates that all public-sector employment (federal, state & local) accounts for 9.0 to 9.6% of jobs.
Somewhere in all of that may be a formula for calculating the median income without the public-sector; perhaps someone here can give us a better idea of the true number :-)
What idiot would buy it for $20,000, when the penalty to NOT buy it and still get it is a measly $2000+?
Are any of our R leaders in front of a camera and microphone shouting this to the people on how this is quite a difference from the assumed, “FREE”???
Wouldn’t it be great if our leader could be elected for a third term, or a fourth?
Right, because he has pets in the SCOTUS to do that for him.
I think that this is probably well under what they actually 'need' to accommodate all the additional tax returns that will be required to be filed under ObamaCare.
Aside from the 11 million (more like 20 million) illegals, you have millions of college students and millions more young workers who right now choose not to file their tax returns as they aren't required to as they do not owe any additional federal income tax. And tens of millions of seniors who do not 'earn' enough taxable income to be required to file a tax return, who now have to file.
Up to 43 million more tax returns to process, along with tens of billions of 'tax refunds' that will be 'owed'. Either the IRS has become incredibly efficient, or they have grossly underestimated the number of new agents required.
Sorry, I forgot to mention that something I read (and, of course, can’t find right now) stated that “average” income is actually higher than median, simply because of the amount of wealth at the top. So, now we need to eliminate those dreaded one-percenters from the calculation: They’re blowing our bell curve ;-)
These were observations concerning the text (overlapping symbolism WRT words and letters). Not the typical type stuff but worth pointing out in case they are of interest to others in their studies. YMMV.
Holy carp!! That is almost more than my part time job pays. Glad I have a decent retirement.
Screw Obamacare and screw the IRS!
They can come get me before I bow down to this bullshit.
Make my day!
.....And the culling begins.
To stabilize is defined as: to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility, or, with respect to [a pregnant woman having contractions], to deliver (including the placenta) .
>Would have been nice if they had announced a $20,000 tax penalty fine tax before the law was passed.<
Thank you “justice” Roberts.
Isn’t that $2600 a MONTH though?
And it will be all the fault of... the rich. But you knew that already.