Where Do STM's Stand in the Pre/post Healthcare Reform Market?

[5starfinancialhealth]

Where is the future for short term medicals? I feel that post october there will be a huge influx of people who would still pay more after the subsidies than a premium would cost for a STM so that product would be in demand considering the first year the tax penalty is only $95. Any thoughts on this? Will this work out if they do get diagnosed with something like cancer in the 6th month after the policy ends, meaning will they have a lane to turn into because obviously they wont re-qualify for the STM but on the same token open enrollment is only during certain times of the year. thoughts?

 

[taterpeeler]

Tax penalty ain't 95 bucks hoss... Read the law

 

[5starfinancialhealth]

Ok, $95 per adult and $45 per child with a family max of $245 in 2014.

 

[AllenChicago]

Ok, $95 per adult and $45 per child with a family max of $245 in 2014.

Washington has successfully brainwashed everyone into believing that the penalty in 2014 for not having a Qualified Health Plan will be just $95. The public, journalists, insurance professionals...EVERYONE focuses on the $95.

The 2014 penalty is THE GREATER OF $95 or 1% of income. How much annual income will generate a $95 tax penalty? $9,500.

If you earn $9,500 you will qualify for MEDICAID. If you are on Medicaid, you will have qualified health coverage and not need to pay the ObamaScare tax-penalty.

If you earn $30,000, your tax-penalty will be $300.
If you earn $50,000, your tax-penalty will be $500.

Our elected Congress inserted the $95 penalty-tax into the equation simply as a diversion. Congressional staff that wrote the bill understand that the average person will latch onto a hard dollar amount quicker than going through the mental "pain" of calculating 1% of their income. Everyone sees "$95 or 1% of income whichever is greater", but it blows right over their heads...just as Congress designed it to do.

But in 2015, when non-QHP individuals and families file their 2014 tax returns, they'll have to calculate and pay that penalty.. and it will be more than $95.
-ac
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Where is the future for short term medicals? I feel that post october there will be a huge influx of people who would still pay more after the subsidies than a premium would cost for a STM so that product would be in demand considering the first year the tax penalty is only $95. Any thoughts on this? Will this work out if they do get diagnosed with something like cancer in the 6th month after the policy ends, meaning will they have a lane to turn into because obviously they wont re-qualify for the STM but on the same token open enrollment is only during certain times of the year. thoughts?

If someone is diagnosed with cancer six months after their TEMP policy ends, they will have to wait for the ObamaCare open enrollment period. For their sake, I hope the diagnosis is DURING open enrollment.

In my opinion, STM will not be needed for the healthy people who want to avoid the costly ObamaCare plans until 2014. This year, you can purchase/sell an Assurant or UnitedHealthOne/Golden Rule major medical that will run to December 2014.
-ac

 

[stuy119]

Washington has successfully brainwashed everyone into believing that the penalty in 2014 for not having a Qualified Health Plan will be just $95. The public, journalists, insurance professionals...EVERYONE focuses on the $95.

The 2014 penalty is THE GREATER OF $95 or 1% of income. How much annual income will generate a $95 tax penalty? $9,500.

If you earn $9,500 you will qualify for MEDICAID. If you are on Medicaid, you will have qualified health coverage and not need to pay the ObamaScare tax-penalty.

If you earn $30,000, your tax-penalty will be $300.
If you earn $50,000, your tax-penalty will be $500.

Our elected Congress inserted the $95 penalty-tax into the equation simply as a diversion. Congressional staff that wrote the bill understand that the average person will latch onto a hard dollar amount quicker than going through the mental "pain" of calculating 1% of their income. Everyone sees "$95 or 1% of income whichever is greater", but it blows right over their heads...just as Congress designed it to do.

But in 2015, when non-QHP individuals and families file their 2014 tax returns, they'll have to calculate and pay that penalty.. and it will be more than $95.
-ac

In certain ways, that will affect the 2016 election more than the 2014 midterms. The outrage over the penalties that will hit younger professionals could turn them off from the Dems and force a much lower turnout than they expect.

 

[taterpeeler]

In certain ways, that will affect the 2016 election more than the 2014 midterms. The outrage over the penalties that will hit younger professionals could turn them off from the Dems and force a much lower turnout than they expect.

ding ding ding... you win the cookie..... right on man

 

[timsip]

Don't dance too much, but I do agree for the most part that America will speak their mind in 2016.

Remember, when a 27 year old male compares the penalty maximum in 2016 of $2085 (if they make $83,400 or more) to the likely out of pocket cost of a health plan, the penalty will be pittance. In some states, that $2085 could be the monthly cost of their health plan! It is likely that they will get an accident plan, a cancer/heart plan and pay the penalty and be thousands of dollars ahead. (said slightly in jest)

 

[Ann H]

Kudos to Allen in Chi for bringing us back to reality. That 1% (which increases in 2015 and 2016) can cause some pain.

Let's not forget that the penalty is also capped at the cost of the lowest-cost bronze plan. So, if you make $500,000, and 1% penalty is $5,000, but the lowest-cost bronze plan is less than that, then your penalty is reduced to be the same as the premium. With these spiking premiums, the 1% penalty could rack up some real dollars, especially for families or older people who have premiums a lot larger than my $5,000 example.

And...... if the lowest-cost bronze plan costs more than 8% of your AGI, you are exempt from the penalty.

 

[AllenChicago]

Kudos to Allen in Chi for bringing us back to reality. That 1% (which increases in 2015 and 2016) can cause some pain.
And...... if the lowest-cost bronze plan costs more than 8% of your AGI, you are exempt from the penalty.

Thanks Ann. I'm just getting sick and tired of hearing and reading about that $95 penalty! The insurance guys/gals (agents and owners alike) who are pushing hard to sell the Non-QHP limited benefit policies are also using that $95 to eliminate the penalty fears of their prospects. They're making big money in our office selling the stuff, but oh what a mess they're creating for themselves down the road.
-ac