More about Obamatax – Will families be ready to pay $20k per year?

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From CNSNews:

( – 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 a family 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 examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze 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.


About Fr. John Zuhlsdorf

Fr. Z is the guy who runs this blog. o{]:¬)
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  1. StJude says:

    What millions of people will do is pay the 2,000 fine instead. obamacare lets you purchase health insurance on the day you need it with a pre existing condition.
    it will fail.. probably designed to.
    make way for single payer.. this is what they want.

  2. nmoerbeek says:

    Father Z,

    How is Obamacare going to effect Priests and Religious?

  3. cwalshb says:

    What happens for a family of 6? 8? 10? 12+? This would seem to make living on a single income impossible, making a family of 4-12+ very difficult.

  4. cwalshb says:

    a very difficult life, that is, not impossible, but that’s a lot of burden on parents to have a double income and live out their vocations…

  5. mamajen says:

    That would do us in. It would be back to work for me–another example of Obama taking away our freedom. For now we are fortunate to have insurance through my husband’s employer, but I can’t assume that will last. Right now we are trying to save around $20,000 for a six-month emergency fund, and I have estimated it will take three years or more.

  6. mamajen says:

    Now that I think of it, that $20,000 premium isn’t that shocking. As part of my emergency fund calculations, I included 6 months of COBRA, which came out to $9,600 for our family of three. I think the plan would be a lot better than “bronze”, but it’s still a mind-boggling expense that we wouldn’t be able to afford for long.

  7. Joy says:

    Agree with StJude. My husband, a physician, thinks all of this is designed to price everyone out of health insurance so that the gov’t can say that single payor is the only way to go. He is seriously looking into another career right now, along the lines of truck driving.

  8. Supertradmum says:

    Undermine the family and one undermines democracy. This is all planned, folks.

  9. MKR says:

    The people running the country at the moment are evil, abusive liars. And I see little hope of getting them booted in 2014.

  10. wmeyer says:

    It’s in the script. No way they can transform this to a socialist republic without first collapsing the economy. And I think they are getting very impatient for that result.

  11. StJude says:

    Joy … that makes me so sad to read. A physician.. a man smart enough to know how to heal people wanting to leave the profession.
    Read somewhere else.. it wont be long before Dr’s only take cash, no insurance and will probably carve out a niche for themselves. Then of course big brother Govt will deem that illegal.

    God help us all.

  12. Supertradmum says:

    St.Jude, Doctors use to take only cash in the old days before insurance and that is what those of us in private medicine have to do in socialist countries in Europe.

  13. Rellis says:

    I don’t say this lightly or to puff myself up. I’m probably the #1 expert in the country on Obamacare taxes, having developed probably every list you have ever read on the subject. I’m Tax Policy Director at Grover Norquist’s Americans for Tax Reform.

    No one–no one–hates Obamacare more than I.

    And I can tell you that this is a misinformed story by CNS. The IRS uses examples in regulations all the time, and the numbers rarely have anything in common with what you would see in the real world. They are for illustration purposes only.

    If you’re looking for a number, look to the average amount for a family plan as reported by AHIP, the insurance trade association. That number is more like $14,000. But for the cheapest plan, as opposed to the average? Call it $10,000. This will be subsidized by a combination of employer contributions and tax credits.

    And those saying so are absolutely correct that a rational person will choose to go without care and pay the mandate non-compliance tax instead.

  14. kat says:

    I guess I missed out on something…I didn’t see where my husband or I were getting a $14000 raise in order to pay for our health care…and if the fine is $2000 per person in the family, we would owe $16000 for that. That’s not in my budget either. Frankly, if the fine is $2000 per family, it’s not in my budget. … sigh…

  15. jhayes says:

    As Supertadmum’s link points out, if you earn less that 4 times the Federal Poverty Level, the most you have to pay for insurance is 9.6 ercent of your income. The rest is subsidized by the government.

    For the family of 5 in the IRS example. 4 times the Federal Poverty Level this year is $108,040 per year. A family earning $108,400 would pay $10,371.84 for the insurance.

    The family in the example was earning $120,000 per year, so it had to pay the full $20,000, without any government subsidy.

    Of course the IRS was just explaining how to do the calculatons. $20,000 is a figure picked out of the air for the sake of the example. The real pre-subsidy cost of insurance won’t be known until the different insurance companies announce their premiums.

  16. kat says:

    We are a family of 8, and don’t make NEAR the amount jhayes quotes for 4 times the poverty level! But multiplying what we earn would still cost us a bunch more than we can afford. That’s a new bill of thousands of dollars. We are hardly hanging on now. Where are those thousands supposed to come from? Currently we have a PPO through my husband’s work! Which I am pretty sure will disappear ASAP when the company finds the way out with fines rather than insurance. I just don’t see where we are supposed to come up with that money!

  17. jhayes says:

    kat wrote: “Currently we have a PPO through my husband’s work! Which I am pretty sure will disappear ASAP when the company finds the way out with fines rather than insurance.”

    I live in Massachusetts, where we have had RomneyCare for 5 years. People here worried that employers would drop insurance but – in fact – more people now get their insurance through their employer than before the program began.

    For 2013, 100% of the Federal Poverty Line for a family of 8 is $38,890.

    A family that earned $38,890 would pay 2% of their income for insurance, or $777.80 for the year.

    A family that earned $77,780, would pay 6.3% of their income, or $4,900 for the year.

    I hope that lets you sleep better.

  18. Gail F says:

    People really don’t know how much their insurance cost their employers (even though that is all disclosed when they get jobs). Insurances costs an arm and a leg. If companies stop offering it, employees getting it themselves is going to cost A LOT. That’s a shock to a lot of people.

  19. mamajen says:

    The maximum premium for our family under PPACA (without considering the extra family member we will have soon) is over $3,000 more than we are paying now, and I bet the “second best silver plan”, whatever that is, is worse than what we have now, which means we would pay more in doctor’s bills on top of things. I sincerely hope my husband’s company decides to keep our coverage and that they don’t jack up the rates.

  20. Suburbanbanshee says:

    The government already takes maybe 10-20% of our income, and now we have to find another 10%?

    And the more we earn, the more we have to pay, so how will we ever have enough to get by?

    I guess we could start cutting out inessentials, like food….

  21. One of those TNCs says:

    I clicked on that “final regulation” link and read a few pages.

    How can the average citizen understand that gobbledegook?! How can heads of households possibly be expected to make sound decisions about their health insurance when the regulations regarding it are so astoundingly complicated?

    Or is making it incomprehensible part of the plan…”You are too dumb to do this, so we’ll take care of it for you” ??

    God help the U.S.

  22. RobertD says:

    This afternoon, the top-of-the-hour (radio) news went something like this: (deep announcer voice) “President Obama has taken steps to SHIELD religious organizations from …” The lousy news organizations continue to twist and distort.

  23. chantgirl says:

    Depending on immigration legislation, I would not be surprised if premiums doubled over the next five years. People keep bringing up the subsidies that the govt. will provide for families to pay for insurance. From where do we think all of that free money comes?! We’ll be paying for it with taxes. There are no real subsidies. We’ll pay for it either way (unless the govt. just borrows to cover the cost, and then we’ll still eventually PAY for that too).

    Suburbanbanshee says that many are already paying 10-20% of their income in taxes. I’m sure if we looked at the total of federal, social security, medicare, state, local, sales, personal property etc., we are looking at more than that. When did Americans decide the govt. was entitled to an such a percentage of our income? People should be spitting angry that the State considers us and our children to be its’ wards, to be regulated and taxed to death, to be spied upon, and to be granted rights that it deems we have. Where is the outrage? I feel like a minority of Americans are shouting out these dangers in a hurricane, and the majority of the populace has become blind, deaf, and dumb. Paul Revere’s out for his ride, and everyone’s too numb to hear or care.

  24. PostCatholic says:

    Of course the IRS was just explaining how to do the calculatons. $20,000 is a figure picked out of the air for the sake of the example.

    Actually, the number $5,000 was the figure picked out of thin air. For the sake of keeping the example simple, since the example cited included 4 people the $5,000 amount was multiplied by 4.

    I don’t know how you all have fared, but last year we got a premium refund check from our then-insurer; this year our current insurer dropped our premium very slightly. I can’t remember the last time our health insurance didn’t go up significantly at the start of the calendar year.

  25. PostCatholic says:

    forgot a close tag on that first paragraph, sorry.

  26. Sword40 says:

    Between medicare, our F plan Supplemental and partD, my wife and I are paying over $500 per month right now. We are both retired with small incomes. We are stapped as it is but surviving. When Comrade Obama has his way we are “toast”. Our kids are really going to be in trouble.

  27. LisaP. says:

    This stuff gets so complicated. Thanks to jhayes and Rellis for trying to talk me folks off the ledge, but this is really bad. The going group rate for insurance through an employer for a family of 5 with a deductible of $3000 is about $15000 a year. That’s what your boss is paying if you aren’t paying it. Right now, whether you know it or not.

    Rates have gone up under the reforms, every bit of logic says they will continue to rise. The only hope now for the self-insured (and soon to be self-insured when they lose work coverage or their job) is subsidies, the ones you point out. The government has engineered a system where a basic human necessity has to be purchased in such a way and at such a cost that average Americans will be forced to take money from the government to get by. As in so many other cases (use of embryonic stem cells in vaccines, makeup, and food research comes quickly to mind) the point is to make huge swaths of Americans complicitious in order to quiet our objections or undermine them.

    Currently we are paying over half our income for insurance (health, home, car, life) and taxes (no income, but sales, car registration, property on our double wide on land). Way, way over half. We simply can’t pay more. We will be forced to become entirely dependent on the government or entirely dependent on a corporation for our medical financing.

    We will be serfs.

  28. jhayes says:

    Kat wrote “I guess I missed out on something…I didn’t see where my husband or I were getting a $14000 raise in order to pay for our health care…and if the fine is $2000 per person in the family, we would owe $16000 for that. That’s not in my budget either. Frankly, if the fine is $2000 per family, it’s not in my budget. … sigh…”

    It’s a maximum of $2,085 per family unless you earn above $100,000 per year. From my earlier post, you can probably buy insurance though your State Insurance Exchang for less than that.

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