Millions of uninsured Americans, including tens of thousands of Arkansans, have a week left to sign up for health coverage or risk facing a penalty when they file their taxes next year.
For people who buy health insurance on their own, rather than through their employer, Sunday is the last day to sign up for coverage taking effect this year.
Although the number of people without health insurance has been dropping, 33 million Americans, including 287,000 Arkansans, went without it during all of 2014, according to the U.S. Census Bureau’s Current Population Survey.
Under the 2010 Patient Protection and Affordable Care Act, the penalty for going without insurance this year is the greater of $695 per adult, $347.50 per child or 2.5 percent of a household’s income above the tax filing threshold.
Those who fail to sign up by the deadline won’t get another chance until the next open enrollment period, expected to begin in October or November, and their coverage won’t start until 2017.
Avoiding the penalty is one reason Brenda Adcock, 53, signed up. She did it with the help of an outreach worker, signing up through healthcare.gov last month for a Centene Corp. plan, marketed under the name Ambetter Arkansas.
But protection against medical expenses was a bigger concern, she said.
“I’m getting older, and you never know what’s going to happen,” said Adcock, who lives near Monticello.
PENALTIES AND CREDITS
The penalty is assessed against people who go without coverage for more than two months during the year.
In 2014, the penalty’s first year, it was the greater of $95 per adult, $47.50 per child or 1 percent of a family’s income above the tax filing threshold, which was $10,150 for an adult or $20,300 for a married couple filing a joint return.
Last year, the penalty increased to $325 per adult, $162.50 per child or 2 percent of household income above the tax filing threshold.
The penalty is prorated based on the number of months the individual lacked coverage and is not assessed against those who would have to pay more than 8 percent of their incomes for insurance.
It is capped at the national average annual premium for a bronze plan, designed to cover 60 percent of a typical patient’s expenses.
Last year, the cap was $2,484 per individual or $12,420 for a family with five or more members.
The Internal Revenue Service reported in July that 7.5 million taxpayers nationwide who lacked coverage in 2014 paid penalties averaging $200.
The Menlo Park, Calif.-based Kaiser Family Foundation estimated that people who were uninsured in early 2015 would face an average household penalty of $661 if they remained uninsured throughout 2015 and an additional $969 if they lacked insurance this year.
With the help of federal tax credit subsidies, about 28 percent of those who lacked insurance early last year could enroll in a plan this year without having to pay a premium, and 48 percent could pay less in premiums this year than they would face in penalties if they remained uninsured, the research organization estimated.
The tax credit subsidies, paid directly to insurance companies to reduce premiums, are available to people who don’t qualify for Medicaid or job-based coverage and earn less than 400 percent of the federal poverty level: $47,080 for an individual, for instance, or $97,000 for a family of four.
The credits ensure that consumers would not have to pay more than a certain percentage of their incomes for the second-cheapest silver, or mid-level coverage plan, available in their coverage region.
The percentage used to calculate the credits ranges from about 3 percent for those with the lowest incomes to just under 10 percent for those with higher incomes.
According to reports released by the U.S. Department of Health and Human Services, the average Arkansan who enrolled and qualified for tax credits as of Dec. 26 was paying $17 more in premiums compared with about 11 months earlier.
From Jan. 30, 2015, to Dec. 26, the average monthly premium for an enrolled Arkansan rose by $22, to $419, while the average monthly tax credit rose by $5, to $292, according to the reports.
As a result, the average premium charged to enrollees, after the credits were applied, rose from $110 as of Jan. 30 to $127 as of Dec. 26.
Of the 65,451 Arkansans who had enrolled as of Dec. 26, 86 percent qualified for the tax credits, according to the reports.
LAPSES IN COVERAGE
Tax credits helped Adcock, who works part time as a bookkeeper for an insurance agency, buy coverage in 2014 through healthcare.gov in an Arkansas Blue Cross and Blue Shield plan, giving her coverage for the first time in about 15 years.
But even with the credits, she let the coverage lapse because she couldn’t afford the premiums — about $60 a month after tax credits were applied.
Last year, she enrolled in another plan, offered by Centene Corp., but again dropped it because she couldn’t pay the premiums, which were $167 a month after applying the tax credits.
She ended up paying a penalty for her gap in coverage in 2014 and expects to pay one for last year.
“It wasn’t very much,” Adcock said of the penalty for the 2014 coverage gap, but her tax preparer told her “it would get higher every year.”
She said she hopes to keep up with the $63 monthly premium for her new Centene plan and avoid having to pay a penalty again when she files her taxes next year.
Although she ended up having to drop her coverage in 2014 and 2015, she said she was glad to have had it while it lasted.
In 2005, she said, she inquired about getting health insurance for herself and her husband and was told it would cost $1,100 a month.
“There’s no way we could have afforded that,” she said.
Her husband later qualified for Medicare.
The insurance subsidies are “a good program,” Adcock said.
“For some people, without this, they wouldn’t be able to have a plan at all.”
HELP WITH ENROLLMENT
According to the Arkansas Insurance Department, 65,437 Arkansans were enrolled in coverage through the state’s federally run health insurance exchange as of Jan. 1.
That was up from 53,271 who were enrolled as of Oct. 1, a month before the start of the open enrollment period for coverage starting this year.
But the total is still down from June 1, when 68,232 Arkansans were enrolled.
The totals don’t include enrollees whose premiums are paid by the state Medicaid program under the private option. That assistance is available to Arkansas adults with incomes of up to 138 percent of of the federal poverty level: $16,243 for an individual or $33,465 for a family of four.
About 199,000 Arkansans were enrolled in the private option as of Oct. 15.
People who qualify for the private option can enroll throughout the year, although they can change plans only during the open enrollment period.
Arkansans can shop for plans and apply for assistance by visiting healthcare.gov, by contacting a federal call center at (800) 318-2596, or by mailing an application to the Health and Human Services Department’s Centers for Medicare and Medicaid Services.
Medicaid applications can also be submitted through a state website, access.arkansas.gov.
Several hospitals, nonprofit organizations and other groups are offering one-on-one help with enrollment. Consumers can make an appointment online at arenroll.org, which also has a link to a list of enrollment events.
Among the groups helping people enroll is the Arkansas Navigator Coalition, which is part of the University of Arkansas’ Partners for Inclusive Communities.
Coalition co-director David Wright said the group’s outreach workers have been getting an increasing number of inquiries from consumers since the beginning of the month.
He said he expects the pace of enrollment to increase leading up to the deadline.
“I think the word’s getting out to people on what they need to do,” Wright said.