Millions to be Penalized by ObamaCare Tax

 

Last updated 1/9/2015 at 9:37pm | View PDF



About 6 million people will pay a penalty in 2016 because they lack federally mandated health insurance, a new analysis shows. The previous estimate was that about 4 million people would be hit with the health insurance “tax” in four years.

Beginning in 2014, the federal health care reform law – sometimes called “ObamaCare” – will require most legal U.S. residents to either obtain health insurance or pay a penalty tax. In 2016, that penalty will be $695 per person or 2.5 percent of a household's income, whichever is greater. Earlier this year, the U.S. Supreme Court upheld the controversial health insurance mandate.

The nonpartisan Congressional Budget Office (CBO) and Congress' Joint Committee on Taxation estimate that about 30 million people under age 65 won't have health insurance in 2016, but that most of them won't need to pay the tax. Among the reasons for exemptions from the tax are religious beliefs or extremely low income.


The estimated 6 million people who will be taxed will end up paying about $7 billion in 2016, according to the CBO. That's up about $3 billion from the CBO's previous estimate.

“Among the uninsured individuals subject to the penalty tax, many are expected to voluntarily report on their tax returns that they are uninsured and pay the amount owed. However, other individuals will try to avoid payments,” the CBO says.

Erin Shields Britt, a spokeswoman for the U.S. Department of Health and Human Services, shrugs off the new CBO numbers, pointing out that less than 2 percent of Americans will be affected by the penalty, according to Inquistr.com. She suggests that those who don't have health insurance now should begin buying it as part of their civic responsibilities.

The CBO analysis “doesn't change the basic fact that the individual responsibility policy will only affect people who can afford health care but choose not to buy it,” Britt says. “We're no longer going to subsidize the care of those who can afford to buy insurance but make a choice not to buy it.”

The CBO report prompted Dave Camp, a Michigan Republican who chairs the powerful U.S. House Ways and Means Committee, to once again condemn the federal health care reform law, which was passed in 2010.

“The bulk of the law hasn't even gone into effect yet,” Camp says in a news release, “and already the nonpartisan CBO is increasing its predictions as to how many middle-class and low-income Americans will see their taxes increase because of ObamaCare. This is yet another example of why we need to repeal this law and replace it with a bill that not only lowers health insurance premiums but does so without raising taxes.”

Camp complains that under the CBO's revised scenario, more than 4 million uninsured people with income below 400 percent of the federal poverty level – $98,400 for a family of four in 2016 – will shoulder “an even larger burden” than had been estimated.

“The bad news and broken promises from ObamaCare just keep piling up,” Camp says.

 

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