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Surprise! IRS Calculates Cheapest ‘Obamacare’ Plan Will Average $20,000 Per Family
February 2, 2013 at 11:38 PM

Surprise! IRS Calculates Cheapest ‘Obamacare’ Plan Will Average $20,000 Per Family

When the Obama White House and Congress passed The Patient Protection and Affordable Care Act (i.e. “Obamacare”), we clearly recall being told that the bill would save Americans money.

Yet, as reports, the Internal Revenue Service (IRS) in a regulation issued Wednesday “assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.”

Wait, what?

Yes, while explaining the penalty for not purchasing government insurance, the IRS calculates that the average annual cost for a family will be at about $20,000.

“The IRS’s assumption that the cheapest plan for a family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan,” reports.

“The examples point to families of four and families of five, both of which the IRS expects in its assumptions to pay a minimum of $20,000 per year for a bronze plan,” the report adds.

Wait a minute. What is the exact language of the IRS regulation?

“The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000,” the regulation states.


“Bronze will be the lowest tier health-insurance plan available under Obamacare — after Silver, Gold, and Platinum,” CNS explains. “Under the law, the penalty for not buying health insurance is supposed to be capped at either the annual average Bronze premium, 2.5 percent of taxable income, or $2,085.00 per family in 2016.”

In the new rules published Wednesday, the IRS also made law the regulations regarding the fines and penalties incurred if someone chooses not to buy the insurance. And in an attempt to explain these laws, the agency draws up a few examples.

“[T]he IRS assumes that families of five who are uninsured would need to pay an average of $20,000 per year to purchase a Bronze plan in 2016,” CNS notes.

“Using the conditions laid out in the regulations, the IRS calculates that a family earning $120,000 per year that did not buy insurance would need to pay a ‘penalty’ (a word the IRS still uses despite the Supreme Court ruling that it is in fact a ‘tax’) of $2,400 in 2016,” the report adds.

And just in case you were wondering how convoluted and contrived these new regulations look like, here’s the exact language from the IRS:

Example 3. Family without minimum essential coverage.

“(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

“(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 – $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

“(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000)


  • imamomzilla
    February 3, 2013 at 7:32 PM

     From what I understand it doesn't go into effect until Jan of Obummercare are now, with the exception of the fines.

    The "carrots" they used to get it to pass were the parts about covering dependant children up to age 26, and pre-existing conditions.

    Quoting CountryLayne:


    I have insurance through DH. He paid $11.30 for our insurance last year. When I did our taxes on H&R Block last night, there was absolutely nothing on there about insurance, or fines for not having any.

    Quoting beckolette:

    I have no idea what everyone is sceaming about. If you have insurance you don't pay a fine, You are not forced to get insurance even if you don't have it. You pay a fine one time and that's it. If you are like us, we are paying 1300.00 a mth for ins for 3 right now. by 2016 I figure ya it will be about 20,000.00 a year for the 3 of us. 

    get a grip. the bill is after the low lives that live off the government for their health plans. It needs tweaking yes, but somewhere something had to be done. Every bill ever passed by the government gets tweaked. Where do you think the Right to Bear Arms came from. 


  • MichelleJ1000
    February 3, 2013 at 7:42 PM
    There are three ways to get health coverage, through your employer, a government agency and state health exchanges. The state health exchanges are the ones with the bronze, silver, gold and platinum levels of coverage. I believe the state exchanges will be open in Sept. or Oct. of this year.

    Medicaid is the most likely government benefit that people will qualify for based on family size and income. There is also a subsidy that will be available to help people pay for insurance.

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