How to Exempt Yourself from the “Individual Mandate”
Like it or not (polls show most Americans don’t), Obamacare is kicking in. But all hope of getting out from under it isn’t lost – at least for a great many Americans. This story will spell out who can claim an exemption from the law and how.
One of the Affordable Care Act’s most controversial provisions, the “individual mandate,” kicks in on January 1st. It requires most Americans to obtain health insurance or pay a punitive penalty. Millions of people – especially the young and the selfemployed – are expected to become liable for the penalty, because it will be much cheaper to pay it than to purchase an available insurance policy.
The costs of insurance premiums are running higher than advertised for young adults. As of this year, a non-smoker in their 20s could still obtain a no-frills plan with adequate emergency coverage for as little as $50/month in some states. No longer. Costs for such people will double, triple, or in some cases quadruple due to new government-imposed insurance coverage requirements.
Who Exactly Is Exempt from the Law?
However, not all Americans will be forced into Obamacare. The law carves out special exemptions – and not just for Administration-friendly corporations and members of Congress. In fact, millions of ordinary Americans will be eligible for one or more exemptions from the individual mandate. Here are the big ones:
- People who cannot afford coverage because the cost of premiums exceeds 8% of their household income.
- People whose household incomes are below the minimum threshold for filing a tax return.
- Native Americans who obtain care through the Indian Health Care service.
- Immigrants who are in the country illegally.
- People with sincere religious objections to obtaining insurance coverage.
Healthcare Cost-Sharing Arrangements as an Alternative to Insurance
Let’s take a closer look at the religious objector category, because it is open to people regardless of their ethnicity or income. However, in order to qualify, your religion must meet certain requirements, and you must participate in what’s known as a healthcare sharing ministry.
According to NPR, “The sharing ministries are not insurance: there’s no guarantee that a given bill will be covered. Instead, it’s like a co-op, where members decide what procedures to cover, and then all pitch in to cover the cost as group….To constitute as a health care sharing ministry — and therefore be exempt from the Affordable Care Act requirements — the nonprofit has to have been in existence since 1999.”
You may be eligible for the religious conscience exemption if you actively adhere to a religion whose teachings reject compulsory insurance coverage. But merely asserting a conscientious objection may not be enough. The law puts government bureaucrats in a position they shouldn’t ever be in Constitutionally – that of judging the legitimacy of citizens’ religious or personal convictions. For example, if you don’t attend church regularly, a bureaucrat may reject your conscientious objection as invalid!
You can bet that Obamacare administrators absolutely will be as petty as they can be to discourage flight from the program. Obama Administration officials are worried that conservatives and others seeking an escape-hatch from Obamacare will flock to healthcare sharing ministries. Some states are even trying to shut them down.
Yet while healthcare sharing arrangements aren’t insurance, they do help people pay for medical expenses in a systematic, reliable way. They do a better job of encouraging individual responsibility than insurance. And since they aren’t stuck with all the government-imposed rules and coverage requirements that health insurers are, healthcare sharing ministries can keep costs down.
Religiously affiliated healthcare sharing systems obviously aren’t for everyone. But they are worth considering if you have a strong objection to being forced into a government-designed insurance system.
Hardships and Penalties
Are Baked into the Obamacare Cake
The Obamacare mandate will cause hardships to
millions of individuals. And many economists
predict that it will inflict a hardship on the
You may be able to spare yourself a direct
hardship from the new healthcare law if you
meet the criteria for a hardship exemption. As Health Affairs analyst Timothy Jost notes, “The open-ended statutory ‘hardship’ exemption
category affords HHS broad discretion to excuse
compliance with the individual mandate where
strict enforcement would in fact cause hardship.”
If you claim an economic hardship, religious
objection, or other exemption, you must obtain
an exemption certificate from the Obamacare
insurance exchange. Otherwise, if you fail to
obtain a statutorily decreed minimum level of
health insurance, you’ll owe a penalty to the
IRS. The fine for 2014 is $95 per adult and
$47.50 per child, or 1% of family income,
whichever is greater. The fine increases in 2016
to as much as $695 per adult and $347 per child,
or 2.5% of family income.
Debt Squeeze Coming
Regardless of whether you seek to opt out of the
Obamacare insurance system, keep your current
coverage, or rely on Medicare, you need to prepare
as an investor for the fallout from exploding medical
costs nationally – especially as they impact the
The U.S. already devotes a staggering 18% of its
GDP to healthcare services, according to the World
Health Organization – more than any other country.
Government’s share of that spending is now set to increase steadily, as it becomes a bigger source of
healthcare expenditures than private citizens. The
mountain of federal healthcare spending that’s on
the way will have consequences for the value of the
U.S. dollar. Trillions of new dollars will have to
be pumped into existence just to sustain unfunded
medical entitlement promises.