Could IRS Penalties Be Cheaper Than Insurance?

Published April 6th, 2017 by USA Rx
Fact Checked by
Chris Riley

Could IRS Penalties Be Cheaper Than Insurance?Under Obamacare, insurance is mandatory. Not having insurance subject’s individuals or households to a fee. However, many Americans feel it makes more sense to pay the penalties than paying for insurance itself. This could perhaps be a sign that the Affordable Care Act is not affordable to all, which was its intended goal.

The Fee For Being Uninsured

Individuals who forgo healthcare coverage are subject to tax penalty, unless they qualify for an exemption. The uninsured fee can be calculated two ways. One is a per-person fee, and the other is a percentage of household income. Uninsured individuals would have to pay whichever is higher, but the average fee comes to $695 per adult or 2.5% of household income.

Why Forgo Healthcare Coverage?

Most choosing to forgo healthcare coverage and instead pay the fee are healthy and do not have diseases. Paying a few hundred dollars a year is significantly cheaper than the premiums that come with many health insurance plans. Around 7 million people who are qualified to enroll in marketplace coverage, with or without a subsidy, would play less in penalties than even for the cheapest health coverage available to them. In 2014, after the law was implemented, around 7.5 million Americans paid an uninsured penalty. Another 12 million received exemptions, thereby waiving the penalty.

The obvious caveat to this is that the individual will need to stay healthy. However, with health care costs rising to the tens of thousands per year, many would still choose to pay for medical services out of their own pocket. Doctors, lab tests, and prescription drugs can be paid for only when the need arises. This is still a very dangerous gamble to take – if an individual does get extremely sick and needs care without having insurance, the costs could quickly reach astronomical and unpayable levels. The individual would likely need to take on debt just to pay their medical bills.

Are You One Of The Americans Struggling To Afford Healthcare?

It does not matter if you are insured, uninsured, or underinsured – using the USA Rx prescription card is a brilliant way to help save you money. If you do not have insurance, the discounts provided by the card can help save you money. If you have high deductibles or a Health Savings Account plan, the card can have large benefits. If you have insurance, the coupons that accompany the card could potentially be less expensive than your copay. Consider using the USA Rx Discount Pharmacy Card to help with rising healthcare costs.

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