Insurance and Finance

Your Health Insurance Under the New Tax Reform

By Casey Kelly-Barton 3.21.18

The new federal tax law that took effect in December has brought even more changes to the constantly changing healthcare and health insurance landscape. Here’s how to navigate it.

The individual mandate has been repealed, but going without coverage can still cost you.

There are two reasons experts say you shouldn’t drop your health insurance. One is that the penalty for going without coverage is still in effect through 2018, which means your family could face a fine of $695 for each uninsured adult and $347.50 for each uninsured child, or 2.5 percent of your household income—whichever figure is higher.

There’s another downside to going without health insurance, of course. “How do you survive a serious illness without coverage?” asks Josh Weiner, a Texas Farm Bureau Insurance Agent in Houston. Even if you’re young and healthy, an unexpected illness or accident can cost far more than you can afford. That’s why Weiner says it’s helpful to think of health insurance costs differently from auto and homeowners coverage.

“If you own a car valued at $15,000 and you are in an at-fault accident with no collision insurance, your maximum personal property loss is $15,000,” he says. “With health insurance, it’s hard to evaluate just how damaging a catastrophic illness can be to your standard of living. Cancer and other long-term illnesses can reach tens of thousands of dollars or more in costs each year. A health plan that covers these worst-case scenarios can provide peace of mind during the healthy years and essential coverage during the sick ones.”

The threshold for deducting medical expenses is lower for now, but you may not need to itemize after this year.

The new tax law allows you to itemize and deduct qualified medical expenses if they add up to more than 7.5 percent of your income, but only for the 2017 and 2018 tax years. After that, the medical deduction threshold goes back up to 10 percent. However, starting with the 2018 tax year, the standard deductions for individuals and married couples will almost double. When that happens, an estimated nine out of 10 taxpayers will be better off taking the standard deduction instead of itemizing and deducting expenses.

Premiums are rising, but you may have more quality options now.

“The previous mindset among most of my clients was PPO or bust, meaning that most people wanted to maximize their flexibility to choose their own medical providers and see specialists with minimal hoops to jump through,” Weiner says. “As the health marketplace reacts to all the recent changes, it’s worth researching HMOs to see if one best fits your needs and budget.”

Texas Farm Bureau Insurance offers competitive health insurance policies through Blue Cross Blue Shield of Texas. Make sure your health coverage is in good shape. Schedule a checkup with your Texas Farm Bureau Insurance Agent.

Coverage and discounts are subject to policy terms and qualifications and may vary by situation. © 2018 Texas Farm Bureau Insurance