Six Million Americans, Mostly Middle Class, Will Face a Tax Penalty for Not Buying Health Insurance Starting in 2016, When the Penalty Fully Kicks In Under Obamacare
Tax Penalty to Hit Nearly 6 Million Uninsured People
September 20, 2012AP - Nearly 6 million Americans — significantly more than first estimated— will face a tax penalty under President Barack Obama's health overhaul for not getting insurance, congressional analysts said Wednesday.
The new estimate amounts to an inconvenient fact for the administration, a reminder of what critics see as broken promises.
That's still only a sliver of the population, given that more than 150 million people currently are covered by employer plans. Nonetheless, in his first campaign for the White House, Obama pledged not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
And the budget office 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. Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four.
Average penalty: about $1,200 in 2016.
"The bad news and broken promises from Obamacare just keep piling up," said Rep. Dave Camp, R-Mich., chairman of the House Ways and Means Committee, who wants to repeal the law.
"This (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," said Erin Shields Britt of the Health and Human Services Department. "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 budget office said most of the increase in its estimate is due to changes in underlying projections about the economy, incorporating the effects of new federal legislation, as well as higher unemployment and lower wages.
The budget office said the penalty will raise $6.9 billion in 2016.
The new law will also provide government aid to help middle-class and low-income households afford coverage, the financial carrot that balances out the penalty.
Nonetheless, some people might still decide to remain uninsured because they object to government mandates or because they feel they would come out ahead financially even if they have to pay the penalty. Health insurance is expensive, with employer-provided family coverage averaging nearly $15,800 a year for a family and $4,300 for a single plan. Indeed, insurance industry experts say the federal penalty may be too low.
"Even more of the middle-class families who President Obama promised would see no tax increase will in fact see a massive tax increase thanks to Obamacare," she said.
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