Some Americans see fine as better option than health insurance

Many Americans see the fines for not being insured as more affordable than actually signing up for insurance, and they say they will continue to pay the fine unless deductibles and premiums decrease, according to an article in the New York Times.

The fact that uninsured numbers are shrinking might show that people are motivated by financial penalties to get health coverage. However, much of America's healthy population has been reluctant to sign up for insurance, and many of them are now weighing whether it's worth it to pay for health insurance instead of just paying the IRS.

People who earn too much money to qualify for federal subsidies that defray the cost of coverage may be most likely to opt out of coverage entirely. A recent Kaiser Family Foundation analysis revealed that paying the penalty may be less expensive than signing up for an insurance plan for most Americans.

Ben Wakana, a spokesman for the Department of Health and Human Services, told the Times that the gamble of not having any insurance is far worse than paying for coverage. If something were to go wrong, he said, the results could be "catastrophic."

For 2016 and beyond, the penalty will be $695 per adult or 2.5 percent of household income, up from $325 per adult or 2 percent of household income last year. Given those parameters, the Kaiser analysis found that the average penalty would be $661 per household for going uninsured in 2015 and $969 for 2016. But for some healthy people, the combined cost of premiums and deductibles, which can exceed $10,000, can make paying the penalty seem like a better deal, the Times article says.

Some Americans are simply choosing to keep certain medications stocked in their medicine cabinets and paying the IRS-imposed fine. For example, one California woman keeps over-the-counter antibiotics on-hand rather than buy health insurance through the California exchange, the article said.

Repealing the ACA individual mandate could reduce the deficit by $300 billion, but it would mean 41 million uninsured Americans in the next decade. As FierceHealthPayer previously reported, the incremental cost of insurance becomes less significant as the mandate penalty grows.

To learn more:
- read the New York Times article