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Opting out of Affordable Care Act could be costly

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CNY/NNY/S. Tier: Opting out of Affordable Care Act could be costly
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Although you don't have to buy health insurance once the mandate kicks in, opting out could really come at a price. YNN's Tara Lynn Wagner filed the following report.

Under the Affordable Care Act, health insurance exchanges open for enrollment on October 1, at which point anyone who is uninsured needs to start comparison shopping. There are four different tiers -- from Bronze to Platinum -- and different providers within those tiers. But the law also allows you to choose none of the above. However, that option has a price tag too.

"If you choose not to have health insurance coverage for the calendar year 2014 when you file taxes in 2015 it will say 'Did you have health insurance coverage?' And you will say yes or no and if you didn't it will apply a penalty," says Elisabeth Benjamin, Vice President of Health Initiatives at Community Services Society of New York.

For the first year, the penalty is $95 per person -- half that for children -- or one percent of your income, whichever is greater.

"And those penalties are going to rise over time so eventually it's going to be very expensive for people to choose to opt out," says Tal Gross, Assistant Professor at Columbia and the Mailman School of Public Health.

In 2016, the fee jumps to $695 per person or 2.5 percent of your salary, again whichever is more.

"That is a chunk of money and you get nothing for it as opposed to maybe you have to pay $1,200 or $2,400 a year and you get really good insurance coverage," says James Knickman, President and CEO of New York State Health Foundation.

Remember, a majority of Americans purchasing insurance through an exchange will likely qualify for financial aid that will bring the cost of their premium down. If after all that you still think you can't afford to buy it, experts point out that you probably can't afford not to.

"Remember, if you have a hospitalization, you're looking at a hundred thousand dollar bill or more," notes Knickman.

That kind of bill could bankrupt a family, an issue Tal Gross of the Mailman School of Public Health has studied closely.

"Healthcare costs are linked to bankruptcy, there is something there. So presumably the Affordable Care Act is then going to, in expanding health insurance, it's then going to lead to a reduction in bankruptcy," explains Gross.

"It is as much about economic security as it is about healthcare. It really does take off the table catastrophic bills that you are not expecting," says Knickman. "This is going to make most Americans sleep better at night knowing that they have this protection and that's important."

For more information about purchasing insurance under the Affordable Care Act, visit the federal government's website ClientIP:, UserAgent: CCBot/2.0 ( Profile: TWCSAMLSP