Consumers likely to accept fines for going without insurance this year

Part of the Patient Protection and Affordable Care Act that was designed to actively encourage consumers to seek out health insurance was a fine that will be applied to their taxes if they go without any sort of coverage, but it seems that – at least for this year – many are willing to take the financial hit if it means they don't have to buy a plan.

That latter part is likely due to the fact that the fine this year is as low as just $95 per person who goes without coverage, meaning that it may appear to be a reasonable alternative to paying potentially hundreds of dollars per month for a plan, according to a report from the Athens Banner-Herald. This fine will only be applied to consumers if they do not have health insurance after March 31, and will be the greater of 1 percent of annual household income or $95 per adult. The charge per uncovered child, meanwhile, is $47.50.

However, experts point out that the strategy may not be a wise one for consumers in the long-term, simply because there is going to be a huge uptick in the fine next year alone, the report said. For 2015, uncovered consumers will face a penalty equal to the greater of 2 percent of household income, or $325 per adult and $162.50 per child who do not have insurance. In 2016, that goes up to either 2.5 percent of household income or $695 per person. That will, obviously, significantly diminish the savings of not having health insurance over the course of a year, and therefore could lead many to reconsider their positions on going without in the near future.

Other things to keep in mind
Of course, consumers who cannot afford health insurance – and can provide proof of that fact may be able to avoid the fine through a hardship claim, but these are people who will make $11,500 or less this year, the report said. In almost all cases, though, those consumers may qualify either for subsidized health insurance through the exchanges or the expanded Medicaid program (if the State opted into the expansion) that came with the PPACA in the first place.

Health insurers will have to keep in mind that consumers' attitudes toward having health insurance are still changing, and that the PPACA has been controversial. However, trying to highlight the potential savings of having coverage rather than going without might be a good way to generate more business.