4 Million Uninsured Will Pay Tax Penalty by 2016

So says the Congressional Budget Office, which released a brief report today on the effects of the health reform law. According to the report, about 4 million of the 21 million expected to lack coverage in 2016 will be subject to a tax penalty of $695 or 2.5% of income, whichever is higher. The rest of the 21 million will be exempt from the penalty due to immigration status, financial hardship, religious beliefs and other reasons.

These tax penalties are expected to the net the government about $4 billion per year between 2017 and 2019, according to CBO. About three-quarters of those penalized will earn below $59,000; but more than half of the total amount will be paid by those earning more.

This CBO report will no doubt be used by Republicans to show Obama will “tax” many in the middle class, despite his pledge not to. Indeed, in a statement today, Republican Sen. Chuck Grassley said:

“The President and his supporters in Congress are celebrating the benefits of health reform, but they also have an obligation to acknowledge the other side of the coin. There’s a price for not participating, and people will pay it. The mandate is a tax increase that hits middle-class America the hardest. And these people make less than $250,000 a year, which breaks the President’s pledge not to raise taxes on individuals earning less than $200,000 and families earning less than $250,000 a year.”

The 4 million-person figure will constitute about 1% of the U.S. population. Some might have expected the number of Americans hit by the penalty to be higher, given that the individual mandate penalty in 2016 will be far less than the cost of coverage. But those who pay the penalty will get nothing in return while those who shell out for coverage will get health insurance. In Massachusetts, where the individual mandate penalty is also lower than insurance costs, most residents have made a similar calculation. About 97% of state residents have coverage.

Related Topics: CBO, chuck grassley, congressional budget office, individual mandate, Uncategorized
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  • square1

    Religious beliefs? WTF?

  • http://forgottenlord.livejournal.com forgottenlord

    Some religions reject modern medicine in most or all of its forms.

  • Dee in Columbia MD

    You see this is exactly what is wrong with the media because during the campaign Obama didn’t say that those making under 250K would never be responsible for anything forever. He promised not to raise their taxes and that means he wouldn’t rise their income tax. Let get a grip because we all know that those with insurance and even more importantly those of us who have no insurance but must pay out of pocket for health care pay twice as much as we need to n order to cover the costs of those who go to emergency rooms for basically free care. Now if folks can’t afford to buy care they can get a waiver, one that is much more generous than in Massachusetts. But if they can afford to buy coverage, they should, and if they are in a different tax designation just like being single, married or head of household. Now we’ve got insured and maybe my out of pocket expenses will go down and those paying the hidden tax or the insured write-offs will be reduced. Its one thing to keep a campaign promise, which he has and for the press to expand the meaning of that promise beyond belief so that this administration can never do anything about our situation.

    The media did the same thing over lobbyists and transparency rendering an honorable goal impossible to meet.

  • benjallen

    Put another way: by 2016 1% of the population will choose to freeload on the government subsidized health insurance program, and pay a fine for their recalcitrance.

    Framing is an interesting thing, no?

  • grape_crush

    There’s a price for not participating, and people will pay it.

    Yes.

    The mandate is a tax increase that hits middle-class America the hardest.

    No. This is not a tax increase; it’s a means to recoup the cost of having a smaller overall risk pool and providing medical services to people who decline to pay for coverage.

  • grape_crush

    add: …by penalizing those same people.

  • freeinpa

    The looney left spin is in high gear to rationalize another Obama lie.

    Read the text Dee: “will be subject to a tax penalty of $695 or 2.5% of income, whichever is higher”.

    2.5% of income sounds like an income tax to anyone with a nominal familiarity with the English language. And that will only be the start.

  • http://somalistudies.wordpress.com somalistudies

    I must say it is very interesting to follow american politics these days. Looking from the outside ( I live in Norway) it seems as though only one side is participating on the political stage to at least try to make America a better place for its people, while the other side mostly consists of people, parden my norwegian (!) act like lunatics.

    One of the things my fiends and I often discuss is the almost total lack of responsible reporting on the part of many in the US media in setting the record straight. How come the press is afraid to call out a lie and confront the lier ?

  • justmy02cents

    so let me get this straight….
    .
    in 2010 32 million to 45 million people in American (to be distinguished fro American Citizens) are claimed to be without health insurance.
    .
    the House of Representatives and US Senate cobble legislation together to address that crisis.
    .
    President Obama signs that legislation into law.
    .
    AND SIX YEARS from now ( 2016 ) 21 million people in America are projected to STILL be without health Insurance.
    .
    Can somebody in the swamp provide the definition of hood-winked?
    .
    At best the mark has been missed by 47% and at the worst by 66%.
    .
    these percentages depend on accuracy and honesty of the CBO. (I report…you decide)
    .
    This has been done at the expense of 16% of the US economy being absorbed into the federal government.
    .
    Maybe I am nuts (here is your chance Patrick), but this does not make any sense to me.

  • megatronrises

    You really need to get a grip on what constitutes a lie. Sometimes it’s one, sometimes it’s off. Stabilize.

  • megatronrises

    It’s 4 million of 21 million that are expected to not have insurance. Not 21 million.
    .
    And how exactly is all of health care being absorbed into the government? Just because the system now has somewhat more regulation, doesn’t mean it is no longer private.

  • megatronrises

    Can you clarify which side you speak of (I think I know already)…
    .
    Also, I love that you have fiends!

  • grape_crush

    How come the press is afraid to call out a lie and confront the lier?
    .
    Dude, some of us have been trying to get a good answer to that question for a long, long, time.
    .
    When someone in the media is cornered with that question, they usually mumble something about ‘impartiality’ and quickly change the subject.

  • justmy02cents

    welcome to the swamp somalistudies….
    .
    please keep your eye on the Tea Party movement….try to get first or second hand information because depending on the media to do their job is a false hope.
    .
    The Constitution of the United States guaranteed a “free press” and through my readings it appears that the Founding Fathers included that guarantee because much of the citizenry could neither read or write and our modern visual and audio communications were obviously not available.
    .
    Providing for a free press was a method of disseminating important information to the populace. I have read accounts of literate citizens reading flyers, newspapers and other publications to uneducated citizens in the early days of the country. The intent was to have an “informed public” which is also the basis of our public education system as well.
    .
    Implicit in the guarantee of a “free press” is a responsibility to honestly and fairly report matters of general importance to the public.
    .
    There is NOT A SINGLE NEWS OUTLET (FOX included) in America today that fulfills that responsibility.
    .
    The public education system has failed as dramatically as the press (electronic included).
    .
    So here we sit in America looking like a polarized bunch of fools mainly because of the failure of two very important institutions, the MEDIA and PUBLIC EDUCATION.
    .
    With accurate, timely, complete, and honest information, the American people could easily make informed decisions regarding the direction of this country.
    .
    Now it is like WWI where polarized opponents hunker down in trenches and lob hand grenades at each other and accomplish very little.
    .
    This, of course, is just my opinion.

  • justmy02cents

    megatronrises @ 6.1
    .
    read again please.
    .
    “4 million of the 21 million expected to lack coverage in 2016″
    . it IS 21 million according to the CBO.
    .
    regarding your second point, please add “right now” because the publically stated goal is a “single payer system” and that certainly is not PRIVATE.
    .
    you are 0 for 2 sorry

  • megatronrises

    @justmy02cents:
    .
    I agree. Most of the public is woefully uninformed. Nuance has largely left our public debates… and Americans are worse for it.

  • shepherdwong

    “How come the press is afraid to call out a lie and confront the lier ?”
    .
    Stick around, it happens here from time to time. Basically, the reason is because it can get you called liberal, either individually or as an organization. From our pathologically centrist and corporatist elites’ perspective, not much is worse. So they developed a “he-said-she-said” paradigm to avoid ever having to tell the public uncomfortable truths.

  • CP in FL

    2 pesos -
    A single payer system would be great, that would be the most efficient. However, even if our system was transformed into a single payer system, all of the doctors and hospitals that are private now would still be private. Therefore this would still not count as a government takeover. Sorry, you are 0 for 2.
    .
    Now, what is far more likely to happen, is a public option that would compete with private insurance companies. This would bring some needed competition to the industry.

  • http://jcapan.wordpress.com jcapan

    “How come the press is afraid to call out a lie and confront the lier ?”
    .
    B/C they’re employed by giant corporations whose interests contrast with the citizens’ interests. Same reason Obama & his fellow dems (with rare exceptions) are reluctant to call out their opponents as the LADs they are–this would disrupt the machinery of political fundraising, this would be unseemly to the elites that pay their bills too.

  • CP in FL

    2 pesos -
    One more thing, you are indeed “nuts.” However, you don’t seem any more crazy that the standard Republican Wingnut or Tea Bagger.

  • justmy02cents

    Dear CP in FL,

    Substituting name calling and mis-nomers for actual discourse is typical of a person who similarly believes that shouting in an argument furthers one’s point.
    .
    Please deny, if you can, that the HCR bill was misrepresented to bothe the extreme left and the crazy right.
    .
    Please address my point that SIX YEARS from now there will still be 21 million people in America that are uninsured.
    .
    Then explain exactly what this legislation accomplished.
    .

  • justmy02cents

    CP in FL,
    .
    Another question, how many of the 32-45 million uninsured today, do not want insurance, cannot afford insurance, are uninsurable, are illegally in the United States.
    .
    Help me here with some numbers, will ya?
    .
    Then tell me why 21 million of them will still be uninsured in 2016?

  • http://patricksartor.wordpress.com patricksartor

    Hoodwinked: see the Tea Party.
    .
    As for this, the problem is that it is not single payer and, therefore, leaves massive gaps.
    .
    This has been anything but revolutionary.
    .
    It was watered down more and more due to the constant complaints from the right and we will only get about half of the benefits relative to universal health care.
    .
    I, myself, am not going to pay $4,000 per year for health insurance unless I take up sky diving. I visit a doctor every other year. Out of pocket it would cost about $75 every other year.

  • justmy02cents

    Ok CP in FL,
    .
    do your homework and I’ll check in on you tomorrow.
    .
    signing off…..
    .
    justmy02cents
    .
    g’night all!

  • http://patricksartor.wordpress.com patricksartor

    Two cents,
    .
    100% of the people receiving health care will be paying taxes and residing in the United States.
    .
    Contrary to to right wing propaganda, the US government makes a fortune off of undocumented workers.
    .
    Here is how it works: every job requires an I-9 form. If you are not legal to work, you must have fake documentation and pay taxes under that fake or real Social Security number. Then, after you are on the payroll, your employer will pay for your health care.
    .
    If it is fake, the government collects money and does not have to pay out social security benefits since the person is not real.
    .
    Also, a self-employed undocumented worker can use an IRS form to described themselves as an undocumented worker and write a check from their own income to pay for health care.
    .
    If your question is, how many additional undocumented workers (AKA illegal aliens – a highly loaded term since illegal is associated with criminal acts, not civil violation and alien is associated with fictional space creatures, not people) will get health care, the answer is exactly 0.
    .
    All human beings must be treated at emergency rooms now and in the future.
    .
    I’ve worked along side undocumented workers and, it matched what I read in the newspapers: fake documents and paying taxes with those fake documents are a must.

  • http://patricksartor.wordpress.com patricksartor

    Our media is run as a business. Therefore, telling people what they want to hear earns larger profits than telling them what they do not wish to hear.
    .
    Since advertising is the means to paying for the media, the POV most in line with corporate sponsors often wins.
    .
    Hence, Fox News and AM radio are dominated by this profit drive.
    .
    Since other news outlets such as this one have more integrity and have far more credibility to lose, they try hard to be honest, but, often find themselves, as we say, splitting the baby.
    .
    The Congressional Budget office is apolitical and seeks to maximize accuracy. In order to push a right wing agenda, Fox and AM radio do what they can to make unbiased sources such as this and university studies sound like corrupt, smoke filled rooms occupied by men twirling their handle bar mustaches like a modern Tammany Hall instead of a bunch of conscientious, career number crunchers.
    .
    The double edged sword to freedom of the press is freedom lie and lie gratuitously with impunity.
    .
    Perhaps in Norway there is less or no significant appetite for scary bedtime tales of creeping, scary liberals ready to eat your children, but, for now there is one here and it is make money hand over fist telling these tales.

  • http://patricksartor.wordpress.com patricksartor

    freeinpa,
    .
    If I had a dollar for every time you exaggerate or mislead, I would be a millionaire and could afford to quit my day job.
    .
    Obama was seeking a totally different, far more comprehensive system than this.
    .
    Republican obstructionism meant that we needed every single blue dog Democrat’s vote to get anything passed.
    .
    Both Bushs promised us more jobs and peace and prosperity, if that is your criteria for lying, Clinton was the president who, by your definition, lied the least.
    .
    Obama just got half success.
    .
    A compromise is not a lie.
    .
    If nothing passed, we would not have any chance of having Democrats holding either house of congress and nothing on Obama’s agenda would ever see the light of day.

  • http://patricksartor.wordpress.com patricksartor

    Notice one difference: nobody here is posting that the CBO is lying or making things up for a right wing agenda.
    .
    When we hear a reasonable, even very unpleasant fact, we acknowledge it and do not spout out the work “liar” like it is going out of style.

  • prodigy05

    @2 cents:
    i believe kate answered this in the first paragraph. the 21 million uninsured includes those that choose to remain uninsured, undocumented immigrants, religious objectors, and those of us that are too poor to afford health care even with government subsidies and exchanges. single payer is really the most efficient way to obtain truly universal coverage.

  • http://erieangel.wordpress.com erieangel

    Excellent point Patrick. For months the right was claiming the CBO was lying about the cost of HCR ad nauseam. Now we see these new numbers, millions still uninsured in 2016 and the left will do whatever needs to be done to figure out why so many will be without health care, then devise a plan to get that number lower.
    .
    The only true option, IMHO, will be single payer. Its good enough for our seniors. Why isn’t it good enough for everybody else?

  • sasquatch08

    What about the people who legitimately still can’t afford insurance premiums and are then forced to pay the fine?
    .
    Oh wait, I forgot it doesn’t actually have to work the way it’s sold, it just has to sound good.

  • sacredh

    Welcome to swampland somalistudies. Say hello to your fiends for me. I’ll tell my MIL you said hey.

  • allthingsinaname

    Let me put my two cents worth in. To all of you who complain how the bill doesn’t do this or how it doesn’t do that.
    .
    The pox on you. Where were you when this stuff was being cobbled together. You opposed everything, you didn’t want it, now you complain that it doesn’t work, because of some projected results? Why? You guys in effect put the the trash in.
    .
    We could have had a single payer and been done with it.

  • kbanginmotown

    What if in 2010, that $695 could be the annual premium for a public option plan, instead of a penalty…?

  • jbaustian

    freeinpa wrote: “The looney left spin is in high gear to rationalize another Obama lie.
    Read the text Dee: “will be subject to a tax penalty of $695 or 2.5% of income, whichever is higher”.
    2.5% of income sounds like an income tax to anyone with a nominal familiarity with the English language. And that will only be the start. (end quote)
    .
    Actually the $695 figure sounds like a head tax or poll tax, which is unconstitutional.
    .
    But if you want to focus only on the 2.5%, that would apply to taxable incomes over $27,800. I thought the Democrats thought “rich” meant anyone earnning over $75,000? And I didn’t think Obama was going to raise taxes on anyone making less than $200k or $250k.

  • lisa4588

    Obama and our Congress have lied to us, MANY times, defrauded us, stolen from us to GIVE away our U.S. funds. They have kept our peace loving country at war, with MANY countries, for 10 years. They’ve chipped away our freedoms. They’re picking our pockets. They have even allowed an unqualified candidate to become our President! Why don’t THEY ask some questions??

    I wonder, when Obama invited illegal immigrants to move here and offered them free healthcare in exchange for their votes (something he learned while working on the Clinton campaign!), did he tell them about this penalty? Or won’t they have to pay the fines too?

    All this immigration legislation is part of Obama’s planned agenda. Just think, without the help of Congress, “nothing on Obama’s agenda would ever see the light of day”, .as Patricksartor said above!

    I also I heard the Court in Newark is going to hear the merits in the “ineligibility to be POTUS” case. June 29 2010, KERCHNER v OBAMA et al. Keep following…

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