Health Insurance Ads Ignore Obamacare Penalty, Cancelled Plans

Health insurance ads being broadcast now are ignoring the Obamacare penalty and how some people are having their health insurance plans cancelled due to the Affordable Care Act.

As previously reported by The Inquisitr, the debate over whether the Obamacare penalty is actually a fine or a tax has several court cases still working their way through the system, with some critics declaring the Affordable Care Act unconstitutional.

Obamacare marketing plans have been in the wings for a long while now. The idea is to make sure every knows what health insurance plans are available under the Affordable Care Act and also to ensure that at least 2.7 young Americans sign up, which is necessary for the state exchanges to break even.

The Supreme Court said the average health insurance and healthcare cost per year for twenty-somethings used to be $854. In order for Obamacare exchanges to break even the the projected cost those in the 18 to 35 age range to spend $5,800 a year per individual. Because of this there’s even an Obamacare NFL marketing campaign which some have derided as a “war on bros.”

Obamacare Penalty

The Obamacare penalty will increase over time, with the total fine for families of four reaching thousands of dollars by 2016. You must be signed up for health insurance by December 25, 2013 in order to avoid the Obamacare penalty. The original Obamacare penalty maxes out at $95 person or $285 per family, or one percent of the income for a family of four. In 2016, the Obamacare penalty maxes at $695 per person, $2,085 for the family, or 2.5 percent of taxable income, which amounts to $173.75 per month. The payment is made during the annual IRS income tax season.

The penalty is claimed to be necessary in order to increase the size of the health insurance pools. For example, Kathleen Sebelius famous said single men need to pay for maternity care coverage in their health insurance.

Obamacare will also cause about 16 million people, or over five percent of the American population, to lose their health insurance plans. For example, a former news anchor for MSNBC lost his health insurance plan. So President Obama apologized publicly over this issue:

“I am sorry that they are finding themselves in this situation based on assurances they got from me. We’ve got to work hard to make sure that they know we hear them and we are going to do everything we can to deal with folks who find themselves in a tough position as a consequence of this.”

Some reports even claim President Obama knew this would happen for about three years.

Selling The United States The Affordable Care Act

But health insurance ads are not so gloomy. They tend to focus on humor and the happy positives of the Affordable Care Act. Ads stress the “peace of mind” that comes with health insurance and Oregon even held a music contest.

Telephone operators for the phone help systems have been ordered to only mention the penalty if asked. State exchange websites barely mention the Obamacare penalty or tuck it away in the FAQ section. Even the federal website, now infamous for its glitches, renames the fee as an “Individual Shared Responsibility Payment.”

Larry Hicks, a spokesman for Covered California, says the health insurance ads are marketing Obamacare this way on purpose:

“We feel that the carrot is better than the stick. This is a new endeavor. We want people to come in and test our wares.”

Michael Cannon, director of health policy studies at the conservative Cato Institute, claims the Obamacare penalty is being ignored on purpose:

“It might be that they want to be positive. But it’s also the case that an informed customer is not their best customer.”

It’s issues like these that have people searching for health insurance plans that are Obamacare alternatives. But there’s another side to the Obamacare penalty few mention. Based upon the current law the “federal government cannot use its usual tools like fines, liens or criminal prosecutions to punish people who do not pay it.” This means the IRS doesn’t have a plan for those who owed the Obamacare penalty but do not pay it, although it’s possible the IRS could deduct from income tax refunds. But the implementation of such a tracking system has apparently been delayed so it’s possible not many people will pay the penalty the first year of the implementation of the Affordable Care Act.