Penalty for Not Carrying Health Insurance: $843 Billion & Growing

Not carrying health insurance can result in significant financial penalties. The Affordable Care Act (ACA) imposes a penalty on individuals who do not have qualifying health insurance coverage.

The penalty is calculated based on your household income and the length of time you are uninsured. For 2023, the penalty is $843 per adult and $422 per child, or 2.5% of your household income, whichever is greater.

The penalty is paid as part of your annual tax return. If you do not pay the penalty, you may be subject to additional penalties and interest.

Why is There a Penalty for Not Carrying Health Insurance?

The penalty for not carrying health insurance is intended to encourage people to get coverage. Health insurance helps to protect people from the high cost of medical care. It also helps to ensure that everyone has access to quality health care.

Without health insurance, people are more likely to delay or skip medical care. This can lead to serious health problems and higher medical costs in the long run.

How to Avoid the Penalty

There are several ways to avoid the penalty for not carrying health insurance:

• Get health insurance through your employer.
• Purchase health insurance through the Health Insurance Marketplace.
• Qualify for Medicaid or Medicare.
• Have a hardship exemption.

Hardship Exemptions

You may qualify for a hardship exemption if you have experienced certain life events, such as:

• Loss of income.
• Unaffordable health insurance premiums.
• Eviction or foreclosure.
• Bankruptcy.
• Domestic violence.

Common Mistakes to Avoid

There are several common mistakes that people make when trying to avoid the penalty for not carrying health insurance:

• Thinking that you are exempt when you are not.
• Not filing your tax return on time.
• Not paying the penalty in full.

Conclusion

The penalty for not carrying health insurance is a significant financial burden. It is important to understand the penalty and how to avoid it. If you need help getting health insurance, you can contact the Health Insurance Marketplace or your state Medicaid office.

Tables

Table 1: Penalty for Not Carrying Health Insurance (2023)

Table 2: Common Hardship Exemptions

Table 3: Common Mistakes to Avoid

Table 4: Resources for Getting Health Insurance