Under the Affordable Care Act, about 6 million people will pay a penalty in 2016 because they are uninsured, according to a new report from the Congressional Budget Office and staff of the Joint Committee on Taxation.
The estimate represents an increase of 2 million people over projections from April 2010. Most of the increase stems from the effects of legislation enacted since that time, changes in the economic outlook (primarily a higher unemployment rate and lower wages and salaries) and other technical updates.
About 15% of the increase in the number of uninsured people expected to pay the penalty results from the recent Supreme Court decision. As a result of that decision, CBO and JCT now anticipate that some states will not expand their Medicaid programs at all or will not expand coverage to the full extent authorized by the ACA. Such state decisions are projected to increase the number of uninsured, a small percentage of whom will be subject to the penalty tax.
Beginning in 2014, the ACA requires most legal residents of the United States to either obtain health insurance or pay a penalty tax. That penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for uninsured children will be half that amount, with an overall cap applying to family payments); or a percentage of the household’s income that rises to 2.5% for 2016 and subsequent years (also subject to a cap).
CBO and JCT have estimated that about 30 million nonelderly residents will be uninsured in 2016, but the majority of them will not be subject to the penalty tax. Unauthorized immigrants, for example, who are prohibited from receiving almost all Medicaid benefits and all subsidies through the insurance exchanges, are exempted from the mandate to obtain health insurance.
Others will be subject to the mandate but exempted from the penalty tax — for example, because their income is low enough that they are not required to file an income tax return, because they are members of American Indian tribes or because the premium they would have to pay would exceed a specified share of their income (initially 8% in 2014 and indexed over time). CBO and JCT estimate that between 18 million and 19 million uninsured people in 2016 will qualify for one or more of those exemptions.
Of the remaining 11 million to 12 million uninsured people, some individuals will be granted exemptions from the penalty because of hardship, and others will be exempted from the requirement on the basis of their religious beliefs.
A PDF of the report is available at www.cbo.gov/sites/default/files/cbofiles/attachments/Indiv_Mandate_Penalty_One-Col.pdf.
The estimate represents an increase of 2 million people over projections from April 2010. Most of the increase stems from the effects of legislation enacted since that time, changes in the economic outlook (primarily a higher unemployment rate and lower wages and salaries) and other technical updates.
About 15% of the increase in the number of uninsured people expected to pay the penalty results from the recent Supreme Court decision. As a result of that decision, CBO and JCT now anticipate that some states will not expand their Medicaid programs at all or will not expand coverage to the full extent authorized by the ACA. Such state decisions are projected to increase the number of uninsured, a small percentage of whom will be subject to the penalty tax.
Beginning in 2014, the ACA requires most legal residents of the United States to either obtain health insurance or pay a penalty tax. That penalty will be the greater of a flat dollar amount per person that rises to $695 in 2016 and is indexed by inflation thereafter (the penalty for uninsured children will be half that amount, with an overall cap applying to family payments); or a percentage of the household’s income that rises to 2.5% for 2016 and subsequent years (also subject to a cap).
CBO and JCT have estimated that about 30 million nonelderly residents will be uninsured in 2016, but the majority of them will not be subject to the penalty tax. Unauthorized immigrants, for example, who are prohibited from receiving almost all Medicaid benefits and all subsidies through the insurance exchanges, are exempted from the mandate to obtain health insurance.
Others will be subject to the mandate but exempted from the penalty tax — for example, because their income is low enough that they are not required to file an income tax return, because they are members of American Indian tribes or because the premium they would have to pay would exceed a specified share of their income (initially 8% in 2014 and indexed over time). CBO and JCT estimate that between 18 million and 19 million uninsured people in 2016 will qualify for one or more of those exemptions.
Of the remaining 11 million to 12 million uninsured people, some individuals will be granted exemptions from the penalty because of hardship, and others will be exempted from the requirement on the basis of their religious beliefs.
A PDF of the report is available at www.cbo.gov/sites/default/files/cbofiles/attachments/Indiv_Mandate_Penalty_One-Col.pdf.
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