Comment by pjbrunet | Hacker News Reader

Comment by pjbrunet | Hacker News Reader

This is what I think will happen: 1% of uninsured will jump through all the hoops and apply for a subsidy (which is more complicated and more expensive than just picking up the phone and calling BCBS for a high-deductible plan.) 9% of uninsured will finally get insurance to avoid the $500 IRS fine. 90% will do nothing and get a $500 fine from the IRS. 5% of those people will pay the $500 fine which is cheaper than buying insurance. 45% of them will throw the bill in the trash, assuming the IRS knows where they live/work. The other 50% will raise hell they are not paying $500 to the IRS, Obama will feel like a bully and Obamacare will be history.

If I have it totally wrong, don't just downvote, please explain why. I really don't know if the IRS fine will be $500, that's just a number I heard thrown around last year. A $500 fine is less than half the cost a cheap insurance plan for one person, and much cheaper if you have a family. If you're living paycheck to paycheck, a possible $500 fine (that's not even a reality yet) is much less pain than buying insurance right now. My percentage estimates are off the top of my head (not scientific) but I heard 1/3 Americans don't file tax returns so that figured into my estimates. And remember we're talking about uninsured people, I'm thinking a large percentage of them are just getting by.

>(which is more complicated and more expensive than just picking up the phone and calling BCBS.

Source?

>The other 50% will raise hell they are not paying $500 to the IRS, Obama will feel like a bully and Obamacare will be history.

I am not sure how you make that leap.

I think a lot of people will go for the subsidy. Especially people with kids. Two people who together make $30000 with three kids will pay $600/yr for coverage while the fine would be $1000. It only makes sense.

At this point the fine is still imaginary. Nobody has a $1000 fine in their mailbox yet. People are used to getting money back from the IRS. Most people don't understand what a bill from the IRS means. How many people even know there will be a fine? Has Obama talked about the fine yet?

Also, even if you apply for the subsidy, you'll be paying full price for an expensive plan in the meantime. A family that's just getting by (that's why they are uninsured) it's going to be much more affordable to get a high-deductible plan and forget Obamacare altogether. If you're just getting by, you're not planning your finances a year in advance for when the subsidy check might come in the mail. The uninsured are thinking about next month, not a year from now. What percentage of people are sure they will get that government subsidy check? You're assuming uninsured people have extra money saved to pay for a full-price insurance plan right now.

> Also, even if you apply for the subsidy, you'll be paying full price for an expensive plan in the meantime.

This isn't true. The subsidy is estimated and applied when you sign up for a plan, and your premiums are adjusted to account for the estimated subsidy:

https://www.healthcare.gov/will-i-qualify-to-save-on-monthly...

That's interesting but according to your link, Advance Premium Tax Credit <> Refundable Credit. In practice, what will be the difference?

How does an existing high-deductible plan compare to a Bronze plan with the Advanced Premium Credit applied? If it's significantly more coverage, if it's significantly cheaper, if it's easy to sign up for, then it might be attractive to that percentage of uninsured smart enough to jump through the extra hoops, if they actually want insurance, if they can afford a Bronze plan with the "advance" applied. That's a lot of ifs. I think a large percentage of uninsured will opt for the status quo (do nothing) that's just human nature.

According to your link, you have to file your tax return to get the difference (refundable - advanced) paid to you. What percentage of uninsured file tax returns?

Take a look at what happened with the individual mandate in Massachusetts. About 1% of the population (48,000 in 2009) paid the penalty, set at 50% of the minimum insurance premium. Even assuming that the rest of the country has people stupider than Massachusetts, and more ornery, it's really not going to be anywhere near as bad as you're predicting.

I predicted 5% of uninsured who don't want insurance will pay the fine. About 15% don't have health insurance. If it turns out 1% of the population pays an IRS fine, that's even more people than I predicted.

http://en.wikipedia.org/wiki/Health_insurance_coverage_in_th...

No, you said, and I copy-paste quote "90% will do nothing and get a $500 fine from the IRS."

1. I said 90% of uninsured. That would be 90% of 15% of the population. Clearly I'm not saying 90% of the population will get fined. But my estimate will be way off, see #2.

2. Getting fined (what I said) and paying a fine (what you said) are totally different. Only 41% of people file tax returns. You can bet that percentage is much higher among the uninsured. So right off the bat, over half the uninsured should be fined. Those people were in my 90% estimate but there's really no way to fine them. I just did some searching and it apprears you are "exempt from the requirement to obtain minimum essential coverage...if you are not a U.S. citizen, a U.S. national or an alien lawfully present in the U.S." http://www.irs.gov/uac/Questions-and-Answers-on-the-Individu...

This is also interesting:

"44% of (people who file taxes) were unaware that they would face a penalty for not purchasing coverage."

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/15/h...

What are the hoops you think you have to jump through to get a subsidy? The way I understand it is that the exchange website where you shop for plans already has your 2013 income tax return's MAGI figure and will automatically present you with the subsidy based on that. You can tweak it if you predict your 2014 income will differ significantly, and when you file your 2014 tax return there will be a true up if you actual income is really different from the prediction your subsidy was based on.

Well, there's the marketplace application. Let's see the bounce rate on that baby. Then you need to file tax returns to get the tax credit. According to this link, 41% of the population does not file a tax return. I bet the percentage is higher among the uninsured, think about it. http://taxfoundation.org/article/number-americans-paying-zer...

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