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What if I don’t have a job, and can’t afford health care?

Here’s a question from  Newsh:

Q. I’m currently out of work and looking for a  job. What if I can’t find a job, and can’t afford health care access under Obama’s plan? How much is the penalty fee, and what if I choose not to pay it?

A. You’re right: Beginning in January of next year, most of us will have to have health insurance coverage, or we’ll have to pay a penalty. The health insurance you get can include regular health insurance provided by an employer, or it could be insurance you get for yourself. It could also be Medicare, which you might qualify for, given your situation. The Affordable Care Act expands Medicare to cover more people, so you might qualify.

As for the penalty, it will start slowly and build over the next several years. Next year (2014), the penalty will be 1% of your income or $95, whichever one is higher. In two years (2016), it will be 2.5% of annual income or $695, again, whichever is greater.

The good news is that not everybody has to pay a penalty, including:

  • People whose health care coverage would cost more than 8% of what they make
  • People who don’t have to file taxes because their income is too low. (In 2012, that was $9,750 for an individual and $27,100 for a married couple with two children)
  • People who are able to get an exemption based on their religious beliefs
  • Undocumented immigrants
  • People who are in prison
  • Native American tribal members

The penalty will be for people who don’t have health insurance and aren’t in one of these groups. Oh, and you won’t be arrested if you owe a penalty and don’t pay. But you will have to deal with the IRS, and they’re pretty good at collecting.

Another piece of good news is that some people will qualify for tax credits to help make health insurance more affordable. But unlike other tax credits, in this case they’re available right when you get insurance, so you don’t have to pay up front and wait for tax time to get some money back. And you can get the tax credits whether or not you actually file taxes. The credits are paid directly to the insurer by whatever state you live in, so it should be a pretty seamless process.