Next Year’s Obamacare Costs Are Skyrocketing in a Sneaky Way

Date: December 11, 2015

Millions of Americans could buy health insurance today for less than the cost of next year’s fines, new data shows.

Thinking of forgoing health insurance in 2016? Think again. Next year’s Obamacare penalties will cost more than purchasing an insurance plan, a move that could affect some 3.5 million uninsured Americans, according to a new Kaiser Family Foundation analysis.

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About 11 million uninsured people who are currently eligible for Obamacare coverage have yet to enroll. Penalties for those who decline 2016 coverage will average $969, up 47 percent from this year. The flat fee will also increase—jumping from $325 to $695. And if 2.5 percent of your annual income is greater than $695, you’ll pay even more.

Thanks to these hikes, 3.5 million uninsured Americans who are eligible for Obamacare subsidies can feasibly buy a 2016 plan for less than what their penalty would cost—potentially with no premium contribution at all. (The catch? Bronze-level plans come with high deductibles.) 

About 7.1 million people, on the other hand, may find their penalties to be cheaper than even the lowest level of Obamacare premiums due to income and subsidy eligibility factors.

The total number of enrollees is still spiking, though: More than 2 million people enrolled with Affordable Care Act (ACA) insurance plans in November, including 700,000 new users. The Department of Health and Human Services expects the total number to reach 10 million by the time enrollment ends.

Here’s how the penalties stack up for 2016:

  • Average uninsured household: $969 (this year: $661)
  • Average uninsured household that qualifies for Obamacare subsidies: $738 (this year: $389)
  • Average uninsured household that does not qualify for Obamacare financial aid: $1,450 (this year: $1,177)

It’s not just households feeling the Obamacare burden, either. These new fees come on the heels of rising insurance premiums, which are forcing nearly two-thirds of small businesses to pay more than they did last year. Add the new employer mandate on non-insurance-providing businesses with 50 or more employees and health insurance in 2016 looks pretty murky for all.

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