Healthcare Technology Featured Article

September 20, 2012

Feds to Collect Almost $7 Billion in Tax Penalties from Medically Uninsured


The federal government could receive about $7 billion in collections from the approximately six million Americans who will pay a penalty tax because they are uninsured in 2016, according to new estimates from the Congressional Budget Office (PDF).

The Patient Protection and Affordable Care Act (ACA), upheld in June, mandated that most legal U.S. residents buy health insurance or pay a penalty if they don’t. According to the latest figures, about two million more uninsured individuals than originally planned will be penalized, and that includes uninsured dependents who will have others pay a penalty on their behalf. An additional $3 billion more in collections each year will flow in than what the CBO had initially projected in April 2010.

Most will be in the middle class. The CBO analysis found that nearly 80 percent of those who'll face the penalty would be making up to or less than five times the federal poverty level – about “$55,850 or less for an individual and $115,250 or less for a family of four,” Ricardo Alonzo Zaldivar pointed out.

Average penalty: about $1,200 in 2016

But before we get too excited, about 85 percent of the increase is “the result of changes in the CBO's baseline projections, changes in legislation and the economic outlook,” Zigmond cautioned. The remaining 15 percent, according to the CBO, comes from the U.S. Supreme Court's very decision to uphold the Affordable Care Act. "As a result of that decision, CBO and JCT (Joint Committee on Taxation) 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," the CBO analysis said.

After 2016, the CBO projects, total collections from these penalty taxes will average about $8 billion each year from 2017 through 2022. But maybe some people – like my husband – will smarten up and get health insurance. One can only hope.




Edited by Brooke Neuman
Get stories like this delivered straight to your inbox. [Free eNews Subscription]




SHARE THIS ARTICLE



FREE eNewsletter

Click here to receive your targeted Healthcare Technology Community eNewsletter.
[Subscribe Now]