Carmoon Group Ltd. Business Insurance Hempstead New York Page 1

Many Americans Opt to Skip Health

Insurance in 2016

By Floyd Arthur

According to the provisions of the Affordable Care Act, as of January 1, 2016, most

Americans are required to have health insurance or pay a penalty of up to 2.5 percent of

their total household income to the IRS. Nonetheless, according to Obama

administration sources, about 10.5 million adults who were eligible for health insurance

coverage remained uninsured as of fall 2015.

Health Insurance in 2016

According to some of those who have chosen to pay the penalty rather than purchase

health insurance, the decision makes financial sense. Susan Reardon, 61, of Kalamazoo,

Michigan, for example, said in an interview with the NY Times that after calculating the

cost of the cheapest plan available to her, which included a $500 monthly premium and

a $6,850 deductible, she was most likely going to forgo health insurance this year. Like

many others, she believes it will be cheaper to pay out of pocket for her doctor visits and

medications, even after paying the approximately $1,500 penalty.

And if something catastrophic occurs?

“I feel like it’s better just to die,” she said.

Carmoon Group Ltd. Business Insurance Hempstead New York Page 2

High Deductibles A Barrier to Health Insurance

For many Americans, it seems that high deductibles rather than monthly premiums are

the biggest obstacle to being insured. Said Tim Fescoe, a California resident who

purchased health insurance on the state’s healthcare marketplace, Covered California, in

2014, “It literally covered zero medical expenses,” because the policy included a $6,000

deductible for both him and his wife. As a result, they opted to drop their insurance and

pay the penalty in 2015.

The cost of going uninsured is going up this year, to $695 per adult family member or

2.5 percent of the total household income, from $325 per adult or 2 percent of the

household income in 2015. Nonetheless, according to an analysis by the Henry J. Kaiser

Family Foundation, about 7 million Americans would pay less in penalties than they

would for the cheapest insurance available to them on the federal health insurance

exchange. Furthermore, over half would not qualify for subsidies because their incomes

are too high.

Going Without Health Insurance -- A Big Risk

Going uninsured is a big gamble, however. According to the Health Care Cost and

Utilization Project of the federal Agency for Healthcare Research and Quality, there

were 36.5 million hospital stays in the United States in 2012, which averaged four and a

half days and cost about $10,400 each. Nearly 50 percent of those hospitalizations

involved Americans between the ages of 18 and 64 -- the demographic that is most likely

to skip health insurance coverage in the hopes of staying healthy.

What’s more, participation in the health insurance marketplace by the majority of

Americans is a prerequisite for the long-term viability of the Affordable Care Act ,

according to insurance industry experts. Younger, healthier people offset the high cost

of caring for the sicker, older patients who have already signed up.

Carmoon Group Ltd. Business Insurance Hempstead New York Page 3

Whether higher penalties will encourage that increased participation remains to be

seen. According to administration sources, about 2.5 million new enrollees purchased

health insurance on the federal exchange since open enrollment began on Nov. 1, 2015 --

a 29 percent increase over last year at this time.

Open enrollment for this year ends Jan. 31, 2016.

Health insurance decisions are complex and difficult, and making a bad choice can spell

financial ruin for you and your family. So don’t try to navigate the system alone. Our

health insurance experts will provide you with sound advice and guide you through the

process. Just call us at 516-292-3780 any weekday between 9 a.m. and 6 p.m.

,or request a free consultation online now.