The Individual Mandate: How It Affects College Students
One of the most confusing and scary elements of the Affordable Care Act is the Individual Mandate—which demands that you prove after 2014 that you have health insurance, or face a tax penalty. Supporters say it’s the only way to make sure the younger, healthier, and more profitable customers buy into the system—otherwise it will crash.
Detractors both call it a violation of individual liberty and a punitive measure that hurts more than it helps. Either way, in a few short months, it will be law. Here are a few things you should know about the Individual Mandate before it goes into effect.
It’s not that expensive—at first
In 2014, the tax penalty is only $95—or 1% of your income, whichever is more. While that could still be more than you want to pay—especially if your income is high enough to make that 1% more expensive than the minimum penalty—it could be worse. And it will be after 2014, when the penalty goes up to $695 or 2.5% of your income by the year 2016 if you aren’t covered. Still, there’s a cap—the cost of your penalty can’t be more than the least expensive health insurance plan available in your area.
If you already have insurance, it doesn’t affect you
Over 179 Americans already have health insurance through their jobs, or are covered under a family member’s plan. If this is your situation, you won’t have to think about the Individual Mandate at all come 2014. It’s only aimed at people in the individual market who won’t already be covered by 2014.
You have time to figure it out
The penalty only comes into effect if you aren’t covered for three months after the start of 2014. And before that, the health insurance exchanges are supposed to go into effect in October. So after the exchanges go into effect, you should have about six months to find a good coverage option.
Health insurance may not be as expensive as you think
If you make between 133% and 400% of the federal poverty level—that’s between $30,657 and $92,200 for a family of four these days—you could be eligible for government subsidies that will help you pay for your coverage. If you’re a college student—especially if you’re living independently of your parents—you may be eligible for subsidies.
It should be noted that for college students, an Individual Mandate is nothing new. Currently, most colleges require their students to have some form of health insurance coverage, and most colleges offer campus-administered health insurance. At many colleges, you could get expelled for not holding a health insurance policy.
The difference is that the Affordable Care Act gives you more options. If you have a health insurance policy through your traditional or accredited online college, you won’t face a penalty in 2014. But it still might be to your benefit to shop around. That’s because if you buy through the health insurance exchanges, you’re eligible for government subsidies; but if you stick with your college-administered health care, you aren’t. In addition, the health insurance exchanges are supposed to make it easier for shoppers to compare plans and make decisions based on price; theoretically, they’ll drive the price down.
The health insurance exchanges, your parents’ health insurance if you qualify, or your college plan—all of these options are supposed to give you more choice in 2014. While the Individual Mandate might be a problem for many, hopefully there will be affordable choices that make buying health insurance a better option than staying uninsured.
Sources
HHS.gov: Affordable Care Act
Healthcare.gov: Health Insurance Marketplace
Whitehouse.gov: Affordable Care Act
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