TIME Health Care

Obama on the Affordable Care Act’s Fifth Anniversary: ‘It’s Working’

White House Student Film Festival
Martin H. Simon—Pool/Corbis President Barack Obama hosts the second-annual White House Student Film Festival in the East Room of the White House, in Washington on March 20, 2015.

He challenged Republican critics who are campaigning on repealing the law.

President Obama had a simple message on the fifth anniversary of the Affordable Care Act: It’s working.

Speaking in the Executive Office Building next to the White House, Obama argued that his signature health care law was “working better than many of us — including me — anticipated” at increasing health insurance rates and improving the quality of care.

“The bottom line is this for the American people: this law is saving money for families and for businesses,” he said. “This law is also saving lives, lives that touch all of us. It’s working despite countless attempts to repeal, undermine, defund and defame this law.”

In particular, Obama highlighted a government report that showed that fewer mistakes in hospitals saved the lives of 50,000 people between 2011 and 2013, which the White House partly attributed to initiatives to reduce accidental overdoses, bedsores and patient falls.

The remarks came just two days after Texas Sen. Ted Cruz promised to repeal “every word of Obamacare” in a speech launching his presidential campaign, the first Republican to join the 2016 race.

Obama took the opportunity to take a few shots at Republican critics of the law, joking that “death panels, doom, [and] a serious alternative from Republicans in Congress” have all failed to materialize and challenging candidates campaigning for repeal to explain how “kicking millions of families off their insurance” will strengthen the country.

“Making sure that the Affordable Care Act works as intended to not only deliver access to care but to improve the quality of care and the cost of care, thats something that requires us all to work together,” he said.

MONEY Taxes

Why Obamacare Has Made Tax Filing an Even Bigger Headache This Year

piggy bank with band-aid on head
Getty Images

This is the first year that health reform crops up on your tax return. And a new study finds that many Americans who got help with health insurance premiums in 2014 now owe the IRS money.

This tax season, for the first time since the health law passed five years ago, consumers are facing its financial consequences. Whether they owe a penalty for not having health insurance or have to reconcile how much they got in premium tax credits against their incomes, many people have to contend with new tax forms and calculations. Experts say the worst may be yet to come.

When Christa Avampato, 39, bought a silver plan on the New York health insurance exchange last year, she was surprised and pleased to learn that she qualified for a $177 premium tax credit that is available to people with incomes between 100% and 400% of the federal poverty level. The tax credit, which was sent directly to her insurer every month, reduced the monthly payment for her $400 plan to $223.

A big check from a client at the end of last year pushed the self-employed consultant and content creator’s income higher than she had estimated. When she filed her income taxes earlier this month she got the bad news: She must repay $750 of the tax credit she’d received.

Avampato paid the bill out of her savings. Since her higher income meant she also owed more money on her federal and state income taxes, repaying the tax credit was “just rubbing salt in the wound,” Avampato says. But she’s not complaining. The tax credit made her coverage much more affordable. Going forward, she says she’ll just keep in mind that repayment is a possibility.

It’s hard to hit the income estimate on the nose, and changes in family status can also throw off the annual household income estimate on which the premium tax credit amount is based.

Like Avampato, half of people who received premium tax credits would have to repay some portion of the amount, according to estimates by The Kaiser Family Foundation. Forty-five percent would get a refund, according to the KFF analysis. The average repayment and the average refund would both be a little under $800. (KHN is an editorially independent program of the foundation.)

Tax preparer H&R Block has also looked at the issue. It reported that 52% of people who enrolled in coverage on the exchanges had to repay an average of $530 in premium tax credits, according to an analysis of the first six weeks of returns filed through tax preparer. About a third of marketplace enrollees got a tax credit refund of $365 on average, according to H&R Block.

The amount that people have to repay is capped based on their income. Still, someone earning 200% of the poverty level ($22,980) could owe several hundred dollars, says Karen Pollitz, a senior fellow at the Kaiser Family Foundation. People whose income tops 400% of poverty ($45,960 for an individual) have to pay the entire premium tax credit back.

Experts say the message for taxpayers is clear: if your income or family status changes, go back to the marketplace now and as necessary throughout the year to adjust them so you can minimize repayment issues when your 2015 taxes are due.

Many people are learning about what the health law requires and how it affects them for the first time when they come in to file their taxes, says Tara Straw, a health policy analyst at the Center on Budget and Policy Priorities. For the past 10 years, Straw has managed a Volunteer Income Tax Assistance site in the District of Columbia as part of an Internal Revenue Service program that provides free tax preparation services for lower income people.

Some of the recently initiated owe a penalty for not having health insurance. For 2014, the penalty is the greater of $95 or 1% of income. The H&R Block analysis found that the average penalty people paid for not having insurance was $172. Consumers who learn they owe a penalty when they file their 2014 taxes can qualify for a special enrollment period to buy 2015 coverage if they haven’t already done so. That would protect them against a penalty on their next return.

People may be able to avoid the penalty by qualifying for an exemption. Tax preparers rely on software to help them complete people’s returns, including the forms used to reconcile premium tax credits and pay the penalty for not having insurance or apply for an exemption from the requirement. For the most part, the software is up to the task, Straw says, but it comes up short with some of the more complicated calculations.

Case in point: applying for the exemption from the health insurance requirement because coverage is unaffordable. Under the health law, if the minimum amount people would have to pay for employer coverage or a bronze level health plan is more than 8% of household income they don’t have to buy insurance. That situation is likely to be one of the most common reasons for claiming an exemption.

But to figure out whether someone qualifies, the software would have to incorporate details such as the cost of the second lowest cost silver plan (to calculate how much someone could receive in premium tax credits) and the lowest cost bronze plan in someone’s area. The software can’t do that, so tax preparers must complete the information by hand.

“That one in particular has been vexing,” says Straw.

The gnarliest filing challenges may yet come from people with complicated situations, such as those who had errors in the IRS form 1095A that reported how much they received in premium tax credits, experts say.

Take the example of a couple with a 20-year-old son living at home who bought a family policy on the exchange. If midway through the year the son gets a job and is no longer his parents’ dependent, the family’s premium tax credit calculation will be off. The family needs to work together to figure out the optimal way to divide the credit already received between the two tax returns. The goal is to maximize the benefit to the family and minimize any tax credit repayment they may face.

“A lot of tax software is just not designed for that kind of trial and error,” says Straw.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME politics

‘We Need to Get This Right': Obamacare Turns Five

Health Reform Cover
Cover Credit: PHOTO-ILLUSTRATION BY ANN ELLIOTT CUTTING FOR TIME. INSET: BRYCE DUFFY FOR TIME. The April 5, 2010, cover of TIME

The Affordable Care Act was signed on March 23, 2010

When President Obama signed the Affordable Care Act on March 23, 2010, it was obvious that making “Obamacare” official was still only the beginning of the law’s story. “Now for the really hard part,” TIME proclaimed in a cover story about the new law.

Looking back at that story by Karen Tumulty and Kate Pickert that announced the law’s arrival, it’s noteworthy just how tempered expectations were.

As TIME explained:

Economists and health care experts have long agreed on the problems that ail the health insurance system in America. It leaves too many people out. Even those who have coverage may be one diagnosis away from financial catastrophe. On the other side of that same equation lie the waste and excess created by paying doctors and hospitals for the quantity of treatment they provide rather than what works best. By some estimates, as much as 30% of the more than $2 trillion Americans spend on health care each year goes toward treatments that are unnecessary and even harmful. And what does the U.S. get for that staggering investment? Shining hospitals packed with cutting-edge technology but also a population whose health and life expectancy lag behind those of most other industrialized democracies.

Will these reforms turn all that around? We won’t know for years, probably not for decades. The most ambitious element of the new health care law–the expansion of coverage to an additional 32 million Americans–won’t even take effect until 2014. “It’ll take four years to implement fully many of these reforms because we need to implement them responsibly,” Obama said as he prepared to sign the legislation. “We need to get this right.”

The charts that accompanied the 2010 story included predictions for 2019. There number of uninsured Americans was predicted to drop by 28 million — from 50 million at the time of publication, to 22 million — during that time. If those changes happened steadily over the intervening nine years, about 15 and a half million Americans would have gained insurance in the first five years.

Just last week, the Department of Health and Human Services announced that about 16.4 million previously uninsured people have already gained insurance since the law was passed.

Read TIME’s 2010 cover story about the new health-care law, here in the TIME Vault: What Health Care Means for You

MONEY Health Care

Good News. Obamacare Hasn’t Led to Less Health Coverage at Work

"Benefits Meeting" announcement on bulletin board
Getty Images—(c) KLH49

A new survey finds that so far employers don't seem to be cutting worker hours to get out of offering health insurance benefits.

There has been much hand wringing over the health law requirement that large employers this year offer insurance to workers who put in 30 or more hours a week or face penalties for not doing so. The new rules would cost employers a bundle, some fretted, as part-timers clamored for company coverage previously unavailable to them. Others worried that employers would cut workers’ hours to get under the cap.

A new study found that so far there’s little cause for concern: Average enrollment in company plans was essentially unchanged between 2014 and 2015 at 74% of all workers.

The survey of nearly 600 employers by benefits consultant Mercer found that in 2015 the average percentage of employees who were eligible for coverage increased one point to 88%, but it was offset by a drop in the enrollment of eligible workers of one point on average, to 83%.

Part of the explanation for the stable results stems from the fact that most employers were already in compliance, says Beth Umland, Mercer’s director of research for health and benefits.

In 2014, employees had to work 25 hours a week on average to be offered health insurance, according to Mercer. That figure has edged up since 2011, when it was 23 hours weekly, but is still well below the law’s 30-hour threshold.

Still, while the expansion in eligibility wasn’t a big change for many employers, “if you were impacted you were really impacted,” says Tracy Watts, Mercer’s national leader for health care reform.

Food and lodging companies were most affected by the new rules, with the average percentage of workers who were eligible for coverage increasing from 57% to 60%. Other industry sectors that felt the change included health care, where per diem nurses and other professionals take on short-term assignments, and higher education, which employs many part-time adjunct professors, says Watts.

But most employers aren’t changing their practices to discourage health plan enrollment, the survey found. Seventy-three percent said they had no plans to change, while 16% said they ensured that newly hired part-timers work fewer than 30 hours weekly, and 19% said they reduced the hours of employees who consistently or occasionally worked more than 30 hours a week.

Even though the health law aims to encourage employers to offer coverage by imposing fines on those who don’t do so, not all take advantage of the offer. Workers might not sign up because they have other options under the health law. Low-income workers may be eligible for Medicaid in states that have expanded coverage to adults with incomes up to 138% of the federal poverty level. Young people can stay on their parents’ plan until they turn 26 under the health law, and many people continue to get coverage through their spouses.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME Health Care

Support for Obamacare Highest in Years, Poll Says

The country is almost evenly divided.

The gap between Americans who support and oppose President Obama’s controversial health care law shrank to its narrowest margin in more than two years, according to a new poll.

A Kaiser Health Tracking Poll conducted in March found that 41% of respondents had a favorable view of the Affordable Care Act—up from 1% in January—and 43% had an unfavorable view. The numbers are a marked increase from July 2014, when the same poll found 53% of respondents viewed the law unfavorably, and they come just ahead of the five-year anniversary of the law’s enactment this weekend. Kaiser has tracked opinion on the health care law regularly.

Support largely fell along party lines, with 74% of Republicans expressing an unfavorable opinion and 65% of Democrats expressing a favorable view. While most people said the law had no direct impact on them, Republicans were far more likely to say it had hurt them than Democrats.

In total, 30% of respondents said that Congress should repeal the law, including 11% of Democrats and 61% of Republicans, while 46% of respondents said the law should remain as is or be expanded, including 72% of Democrats and 16% of Republicans.

Most respondents—53%—also said they were not aware of the Supreme Court case underway that threatens to roll back a key feature of the law.

The poll of 1,503 adults, conducted March 6-12, has a margin of error of three percentage points.

MONEY Health Care

Your Boss May Be Able To Force You To Buy Health Insurance

The health reform law requires most companies to offer workers good health coverage. It also lets them enroll employees automatically.

Under the health law, large employers that don’t offer their full-time workers comprehensive, affordable health insurance face a fine. But some employers are taking it a step further and requiring workers to buy the company insurance, whether they want it or not. Many workers may have no choice but to comply.

Some workers are not pleased. One disgruntled reader wrote to Kaiser Health News: “My employer is requiring me to purchase health insurance and is automatically taking the premium out of my paycheck even though I don’t want to sign up for health insurance. Is this legal?”

The short answer is yes. Under the health law, employers with 100 or more full-time workers can enroll them in company coverage without their say so as long as the plan is affordable and adequate. That means the employee contribution is no more than 9.5% of the federal poverty guideline and the plan pays for at least 60% of covered medical expenses, on average.

“If you offer an employee minimum essential coverage that provides minimum value and is affordable, you need not provide an opt out,” says Seth Perretta, a partner at Groom Law Group, a Washington, D.C., firm specializing in employee benefits.

If a plan doesn’t meet those standards, however, employees must be given the opportunity to decline those company plans, under the health law. They can shop for coverage on the health insurance marketplaces and may qualify for premium tax credits if their income is between 100% and 400% of the federal poverty level.

Those premium subsidies aren’t available to workers whose employer offers good coverage that meets the law’s standards.

Experts say they don’t expect many employers to strong arm their workers into buying health insurance. Those that do may be confused about their responsibilities under the health law, mistakenly believing that in order to avoid penalties they have to enroll their workers in coverage.

“That is just dead wrong,” says Timothy Jost, a law professor at Washington and Lee University who’s an expert on the health law.

“Nothing in the Affordable Care Act directs employers to make their coverage mandatory for employees,” says a Treasury Department spokesperson. The law requires large employers “to either offer coverage or pay a fee if their full-time workers access tax credits to get coverage on their own in the marketplace.”

Employer penalties for not offering insurance that meets the health law’s standards can run up to $3,000 per employee.

For employers, forcing coverage on their workers could be counterproductive. “Do you really want to limit employees’ ability to select whether they get this coverage? What impact does that have from talent management perspective?” says Amy Bergner, managing director at human resources consultant PwC.

The practice of automatically enrolling employees in health insurance isn’t new. Many employers have been doing it for years. Some enroll new employees in the least expensive company plan, for example. But employees have generally had the option to opt out of the coverage if they wish.

Automatic enrollment makes it simple to satisfy the health law’s requirement that most people have health insurance, experts say.

The health law stipulates that employers with more than 200 full-time workers are required to enroll newly hired full-time employees in a plan unless the employee specifically opts out of the coverage. However, the provision won’t take effect until the Department of Labor issues regulations.

Employees who are unhappy about being required to buy into a company plan could complain to the Department of Labor, some experts say. It’s unclear whether such efforts would succeed.

Employment law experts point to a 2008 decision by the Department of Labor dealing with state laws that restrict employers from making deductions from workers’ paychecks without their consent. The department issued an advisory opinion saying that federal ERISA law pre-empted a Kentucky law that required an employer to get an employee’s written consent before withholding wages to contribute to a group health plan.

Although that decision doesn’t have the force of law, it suggests how the Labor Department views such issues, says Cheryl Hughes, a principal at Mercer’s Washington Resource Group.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

TIME Supreme Court

Obamacare Arguments Center on Chief Justice

Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally in Washington on March 4, 2015.
Alex Wong—Getty Images Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally in Washington on March 4, 2015.

John Roberts saved the law in 2012, but he played his cards close to the vest Wednesday

Chief Justice John Roberts once again holds the fate of Obamacare in his hands.

The conservative Supreme Court Justice who provided the crucial vote to save the Affordable Care Act in 2012 was at the center of many of the arguments Wednesday on another legal challenge to the law. But like the eye of a hurricane, he remained quiet.

Roberts made only two substantive remarks during the hour and a half of oral arguments on King v. Burwell. One was to casually dismiss a line of argument pursued by liberal Justice Ruth Bader Ginsburg, who had peppered an attorney behind the lawsuit with questions over whether the plaintiffs had the standing to sue. The other was to note that a future President — presumably a Republican — could reverse the Obama Administration’s readings of the law.

But Roberts was the unspoken audience for an argument made by two other Justices because of his reasoning in the last Obamacare challenge. In that decision, he argued that Congress could not force states to expand Medicaid by threatening them financially — something he compared to putting “a gun to the head.”

This time around, liberal Justice Sonia Sotomayor and conservative Justice Anthony Kennedy argued that if Congress made health-insurance subsidies dependent on whether a state set up its own exchange — the argument that conservative lawyers were making — that would be similarly improper coercion.

“If we read it the way you’re saying, then we’re going to read the statute as intruding on the federal-state relationship,” Sotomayor told a lawyer for the plaintiffs. “Because then the states are going to be coerced into establishing their own exchanges.”

Kennedy was even more blunt. “If your argument is accepted, the states are being told either create your own exchange, or we’ll send your insurance market into a death spiral,” he said. “The cost of insurance will be sky­ high, but this is not coercion. It seems to me that … there’s a serious constitutional problem if we adopt your argument.”

Two other conservatives, Justices Antonin Scalia and Samuel Alito, questioned whether the dire warnings that the federal government has presented as potential consequences of a decision really would come true.

“You really think Congress is just going to sit there while all of these disastrous consequences ensue?” Scalia asked. “Congress adjusts, enacts a statute that takes care of the problem. It happens all the time.”

Solicitor General Donald Verrilli then earned a laugh when he responded, “Well, this Congress…”

TIME Supreme Court

4 Ways the Supreme Court Could Rule on Obamacare

Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally in Washington on March 4, 2015.
Alex Wong—Getty Images Supporters of the Affordable Care Act gather in front of the U.S Supreme Court during a rally in Washington on March 4, 2015.

The health care law is once again before the high court

When the Supreme Court last considered the Affordable Care Act, the argument was easy to follow: Does the federal government have the power to force people to buy health insurance?

The question this time is a lot more complicated.

As the justices discussed a single line in the law Wednesday, they were debating issues of administrative law precedent, congressional intent and interpretation of statutory language. But the bottom line is still the same. If the court’s majority rules a certain way, the law would collapse, causing as many as eight million people to lose their health insurance.

The case centers on whether states need to set up their own health insurance exchanges under the law for their residents to qualify for subsidies that make it affordable.

Here’s a quick look at four ways the court could rule.

The Liberal Hail Mary

The ruling: The majority finds that the people bringing the lawsuit don’t have the standing to sue and throws out the case without ruling on the merits.

The argument: One plaintiff listed her address as a motel. The others might qualify for veterans health care or Medicare, which would make their claims of being hurt by the law a moot point.

Why they would do it: Chief Justice John Roberts might agree with the liberal justices as a face-saving way to make the case go away. He was quiet during oral arguments Wednesday.

Why they wouldn’t do it: Even if three of the four plaintiffs don’t have standing, if the fourth did, the case could move forward. It’s a longshot.

The Ironic Precedent

The ruling: The majority finds that forcing states to create their own health insurance exchanges at the risk of their residents losing subsidies is improper coercion.

The argument: Without the subsidies, a state’s health insurance market would fall into a “death spiral.” That means the law would effectively force states to build one.

Why they would do it: In its last decision, the court overturned a part of the law forcing states to expand Medicaid, saying it was coercive. Justice Anthony Kennedy seemed open to that logic again.

Why they wouldn’t do it: It’s a constitutional argument, which is a bigger deal than for the justices to simply interpret the law’s wording.

The ‘Not Our Problem’

The ruling: The majority finds that the law is poorly written but needs to be interpreted strictly, essentially saying the court’s hands are tied.

The argument: Congress didn’t do its job well when it passed the final version of the bill, but it’s not up to the White House — or the court, for that matter — to fix it.

Why they would do it: The Supreme Court regularly throws laws back to Congress to fix. They’ve done it recently it with a fair pay law, the Voting Rights Act and campaign finance law.

Why they wouldn’t do it: Precedent. In the most-cited administrative law case in history, the Supreme Court found that the White House should have leeway to interpret poorly worded laws.

The Conservative Hail Mary

The ruling: The majority finds that Congress intended for a state’s residents to be denied subsidies if the state didn’t set up its own insurance exchange.

The argument: An MIT economist who helped design the law once said that in an academic lecture that has since gone viral in conservative circles.

Why they would do it: The lawsuit’s supporters have argued that Democrats in Congress intended this all along. Going along with that argument would avoid the problem of legal precedent.

Why they wouldn’t do it: There’s lots of evidence, such as interviews with the staffers who actually wrote the law, that Congress didn’t intend this. It’s a longshot.

TIME Supreme Court

The 4 Words That Could Cause 8 Million to Lose Their Insurance

Marketplace guide Stephanie Cantres works on the Healthcare.gov federal enrollment website to help a resident sign up for a health insurance plan under the Affordable Care Act at a Westside Family Healthcare center enrollment event in Bear, Delaware, on March 27, 2014.
Andrew Harrer—Bloomberg/Getty Images Marketplace guide Stephanie Cantres works on the Healthcare.gov federal enrollment website to help a resident sign up for a health insurance plan under the Affordable Care Act at a Westside Family Healthcare center enrollment event in Bear, Delaware, on March 27, 2014.

Oral arguments in the case of King v. Burwell will be delivered on Wednesday

Nearly eight million Americans could lose their health insurance depending on how the Supreme Court interprets four words in the Affordable Care Act.

At the nation’s highest court on Wednesday, justices will hear arguments in the case of King v. Burwell, the latest challenge to President Obama’s signature health care law and one that could potentially leave it gutted from an unexpected direction.

The 2010 law already survived an earlier Supreme Court challenge on the constitutionality of its requirement that most Americans buy health insurance. But the current case centers on whether, as many Republicans argue, one line in the law was intended to restrict subsidies to people who bought insurance through a state exchange or whether, as Democrats contend, that line was a simple oversight in the law’s drafting.

The consequences are potentially huge. Thirty-four states rely on the federal government to run their exchange, meaning that their residents would lose subsidies, making insurance unaffordable and causing rates to rise for those who remained insured. One study by the Rand Corp. found that eight million people would lose their insurance in those states if the court rules against the Obama Administration.

The Administration contends that the phrase is a “term of art,” and says that other parts of the law show that there is no distinction between federal and state run exchanges.

“If you look at the law, if you look at the testimony of those who were involved in the law, including some of the opponents of the law, the understanding was that people who joined the federal exchange were going to be able to access tax credits,” President Obama said in an interview with Reuters. “And there’s in our view not a plausible legal basis for striking it down.”

The Obama Administration has stated it has no backup plan ready if the Supreme Court rules against it. “If they rule against us, we’ll have to take a look at what our options are,” Obama said recently. “But I’m not going to anticipate that. I’m not going to anticipate bad law.”

Republicans on the other hand, are eager to show they have a Plan B. In the past two days, lawmakers from the House and the Senate have said they’re in the process of working on alternatives to the law, should the Supreme Court rule in favor of the plaintiffs. Reps. Paul Ryan, John Kline and Fred Upton wrote in the Wall Street Journal, they’re proposing an “off-ramp out of Obamacare,” that would allow states to opt-out of insurance mandates and offer options for those who can’t otherwise insurance. Sens. Orrin Hatch, Lamar Alexander and John Barrasso wrote in the Washington Post, they too would help those who can’t afford coverage during a “transitional period” and let states create alternative marketplaces.

Grace Marie Turner, the president of the health-policy organization the Galen Institute, says though Congressional lawmakers are in only in the process of shaping legislation, there’s real opportunity.

“This case provides an accelerator,” Turner tells TIME. “This could provide a real opportunity to begin the process of fixing the law.”

Read next: Here’s the Tough Choice the Uninsured Have to Make Now

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MONEY Health Care

Here’s the Tough Choice the Uninsured Have to Make Now

piggy bank and bottle of pills balancing on either side of a seesaw
Pogonici—Shutterstock

The deadline to enroll in a health insurance plan has been extended—but a quirk in the rules leaves the uninsured with a tricky decision to make.

Americans who didn’t sign up for health insurance by the February 15 end of open enrollment face two serious risks: no insurance coverage for the rest of 2015, and a possible tax penalty next April. Open enrollment for 2016 plans doesn’t start until next October.

What’s more, many who went without health insurance last year—when Obamacare’s requirement that all Americans have insurance, what’s known as the individual mandate, went into effect—are already facing a penalty on their 2014 tax returns.

Many of these uninsured Americans got a break last week. The Obama administration announced a special open enrollment period last Friday. If you still don’t have 2015 health coverage, you did not know about the tax penalty until you worked on your tax return, and you owe a penalty for 2014, you can enroll in a 2015 plan via Healthcare.gov between March 15 and April 30. The second chance is available to people who live in the 34 states with a federally-run insurance marketplace and who file their federal taxes after February 15.

This deadline extension could help a lot of people: Late last year, 44% of uninsured Americans said they had heard little to nothing about Obamacare’s individual tax penalty, according to a poll by the Urban Institute.

There’s a twist, however: To qualify for the extension, you must be subject to the tax penalty, according to the Department of Health and Human Services. But most Americans who are still uninsured could qualify for an exemption from the tax. Take it, and you don’t get more time to buy health coverage for this year.

The Choice

There are more than two dozen ways to get out of paying the Obamacare penalty: you earn less than the tax filing threshold, your cheapest plan costs more than 8% of your income, you were uninsured for less than three months, you filed for bankruptcy, or you had some other hardship.

Altogether, the government estimates that only 2% to 4% of taxpayers will owe the fee. Another 10% to 20% are uninsured but are exempt from the penalty. Those taxpayers have two options:

  1. Pay the tax for 2014 and buy health coverage for 2015 during the special enrollment period, which has the added benefit of getting you out of the penalty next year.
  2. Claim an exemption from the tax for 2014 and go without health insurance again in 2015 (and potentially face the tax again next year).

“The taxpayer needs to make a choice,” says Tara Straw, senior policy analyst at the Center on Budget and Policy Priorities. “It would seem a no-brainer, a week ago, that you would claim an exemption if you were eligible for it. But now, there really should be a discussion about whether it’s better to take the exemption someone is eligible for, or pay a penalty and have a special enrollment period.”

The Potential Penalty

The penalty for being uninsured for all of 2014 is either $95 per person in your family (capped at $285), or 1% of your income (capped at the price of the average premiums for a bronze plan), whichever is higher.

H&R Block has found that so far, the average Obamacare penalty for its clients is $172, decreasing the average refund by 5%.

“It’s definitely a significant amount of money for people who might be low-income and might have a lot of plans and expectations for what they might do with the tax refund,” Straw says. “But we need to weigh that against the fact that the penalty next year is much higher.”

In 2016, the penalty will be either $325 per person in your family (capped at $975), or 2% of your income (capped at the price of the national average premium for a bronze plan in 2015—to be determined), whichever is higher.

The Bottom Line

Are you faced with this choice? Keep in mind that health insurance may be less expensive than you think. If your income is less than 400% of the federal poverty level—$95,400 for a family of four in 2015—you’ll likely qualify for a subsidized premium.

HHS found that 87% of the people who bought an Obamacare plan qualified for this tax credit, bring the price of health insurance down to an average of just $82 a month. Use the Kaiser Family Foundation’s calculator to get an estimate of your costs.

Also, if your income is less than 133% of the poverty line—$15,654 for a single person in 2015, $32,253 for a family of four—you could qualify for Medicaid. You can sign up for Medicaid any time during the year, Straw says.

“It’s unfortunate that some people might be put in this position, but at the end of the day, if someone can enroll in coverage and avoid paying a penalty for 2015, that’s still a good deal,” Straw says.

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