My income is lower than average, so we watch every penny carefully and live within our means. I used to have a Healthcare plan that fit my budget and worked well for my family of 6. It cost less than $300 per month, and the deductible was $4000. I felt good about being able to provide insurance for my wife and our four children with a plan that I liked and found affordable, and I didn’t have to utilize medicaid. Today, the cheapest plans available cost over $600 per month with a $12,000 per person deductible! Oh, but that’s okay, because my income is low enough that I’ll get lots of tax credits thanks to Obamacare, right? Wrong. I’m poor, but not the right amount of poor.
You see, I make about $30,000 a year so I’m considered too poor to qualify for any tax credits. Basically, to get any benefit from Obamacare you have to be just the right amount of poor. And I am not… Or I might be… Kinda depends. Confused yet? Keep reading.
I happen to own my own business so my income does fluctuate. It’s difficult to predict an exact number but I should make between $30,000 and $33,000 this year. At $30,000 I’m too poor to get help, but at $32,000 I qualify for over $300 per month in tax credits! Before the enrollment period is over I need to guess exactly what my income is going to be. Guessing wrong could have major repercussions. So here are my options:
I can estimate my income at $31,000 (the wrong amount of poor). I won’t qualify for tax credits, but I will be exempt from the requirement to have insurance in the first place (good thing I suppose, since it’s entirely unaffordable without the tax credit). The kids could be on medicaid, but my wife and I would be uninsured and would have to be very careful not to get sick or injured. One stay at the hospital could bankrupt us. But to make matters worse, there’s also a catch here. If I accidentally make a few hundred dollars more than I predicted, then I’ll have to pay a penalty because I chose not to get insurance when I should have. Okay, “chose” is the wrong word. “Guessed that I’d be exempt” would be more appropriate.
Option 2 is to predict an income of $32,000 (the right amount of poor). In that case, I’ll qualify for all sorts of help, but if my income falls short of 32k, even by a few hundred dollars, I would owe have to pay back every penny of that subsidy.
That’s over $3700 for the year! I guess that’s just the penalty for being the wrong amount of poor.