It’s easy for young, healthy adults to feel invincible. But anyone can get an illness or injury that drives them into medical debt, the leading cause of personal bankruptcy.
Health insurance protects us from these high and often unexpected costs. What’s more, insurance plans now include benefits to help us stay healthy, preventing these costs in the first place. Plans available in the government’s Health Insurance Marketplace provide free preventive care like vaccinations, screenings, and management of chronic health conditions like diabetes or asthma. The Affordable Care Act (ACA) established 10 Essential Health Benefits that all new plans must cover, including hospital stays and costs for prescription drugs.
In Michigan, 24% of 18- to 34-year-olds are uninsured. Under the ACA, up to 190,000 of these young adults could be eligible for Medicaid after it expands later this year, and up to 227,000 could be eligible for tax credits within the Marketplace to lower their insurance costs. Yet among uninsured 18- to 29-year-olds nationwide, less than a third plan to sign up for health insurance this year.
Those who do not obtain insurance is 2014 will be required to pay a penalty of either 1% of their income or $95, whichever is larger, when they file taxes the following year. This fine increases substantially over the next few years. By 2016, the uninsured will be taxed 2.5% of their income or $695, whichever is larger.
If you’re a “millennial” not covered by your employer or parent’s health insurance, be sure to consider all your options before turning away free money from the government and paying this tax penalty – essentially paying to have nothing.
For more information on health care reform, visit HealthCareReformBasics.com. If you live in Michigan, to determine whether you’re eligible for government subsidies to help you pay part of your premium, text “4Subsidy” to 222-752.
Photo credit: Collin Key