The federal government recently published final regulations for the individual mandate of the Patient Protection and Affordable Care Act (ACA). This Forbes article highlights seven items people need to know about not maintaining minimum essential health coverage. The article quotes Milliman’s Paul Houchens discussing the cost of coverage many older individuals pay, which exempts them from the mandate.
Here is an excerpt:
…Paul Houchens, an analyst at Milliman, puts it this way: if you’re 55 years old, and you’re paying $7,800 a year for health insurance, you’ll be exempt from the individual mandate if your income is between 400 percent of the federal poverty level—about $46,000—and $97,500. (If your income is below $46,000, you qualify for at least a partial subsidy of your insurance costs, which, based on the way the law is written, makes the individual mandate apply to you.)
On the other hand, if you’re a 35-year-old, and you’re paying $3,600 a year for your health coverage, the mandate applies to you in nearly all cases, because $3,600 divided by 8 percent is $45,000, which is lower than 400 percent of the federal poverty level.
For more perspective on how the mandate will impact out-of-pocket premiums for bronze-level coverage in the individual market read Houchens’ paper “Measuring the strength of the individual mandate”.