8 Million Americans Paid $1.7 Billion For Not Having Obamacare
Nearly 8.1 million Americans paid $1.7 billion in penalties in 2014 for not having health insurance — more than the IRS initially predicted.
The individual mandate, or what the IRS calls “individual shared responsibility payments,” requires everyone either have insurance or pay a fine, and was one of the last pieces of Obamacare to go into effect. IRS set the fine at $96, or 1 percent of the reported adjusted gross income, whichever is greater, in 2014.
The penalty will increase to a flat payment of $695, or 2.5 percent of gross income in 2016, the Congressional Budget Office said in 2014. After this year, the penalty will be tied to inflation.
“Beginning in 2014, the Affordable Care Act required that individuals must have had health care coverage, qualified for a health coverage exemption, or made a shared responsibility payment with a tax return,” the IRS said in its report of 2014 returns. “A health care individual responsibility payment was made on 8.1 million returns for $1.7 billion, an average of $210 per tax return paying this penalty.”
The number of people paying the penalty rather than purchasing insurance in 2014 is greater than IRS officials initially thought last year. Based on reports, IRS commissioner John Koskinen estimated that around 7.5 million Americans paid $1.5 billion in penalties.
Several Republican senators proposed legislation this summer to suspend the individual mandate if insurance premiums rose.
“Our bill would exempt people from the law’s individual mandate to purchase health insurance if their plan’s premiums increase by 10 percent or the average of their home state’s premiums increase by more than 10 percent,” Sen. Kelly Ayotte, one of the co-sponsors of the bill, said in July.
“Obamacare has failed,” Sen. Tom Cotton, another co-sponser of the bill, said in July. “Premiums are skyrocketing by more than 50 percent in some states, deductibles average more than $5,000 for the cheapest plans, and networks are shrinking Even worse, many of those same families will face a massive tax penalty because they can’t afford care”
Sens. John McCain, James Lankford, Ron Johnson and Richard Burr are also co-sponsors of the Obamacare Tax Relief and Consumer Choice Act of 2016.
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