It’s the tax at the heart of Obamacare, but just more than 1 percent of Americans will end up paying it, according to an analysis by the Congressional Budget Office.
The CBO and the Joint Committee on Taxation (JCT) slashed their estimates for how many people will pay the individual mandate tax penalty in 2016 by a third — to 4 million from 6 million — citing exemptions granted by the Obama administration, including exemptions for people whose plans were cancelled because they did not meet the Affordable Care Act’s requirements.
That’ll lead to $4 billion in revenue in 2016 and $5 billion a year after that — a drop of about $3 billion a year. It will still generate $46 billion over a decade, the CBO said
CQ Roll Call’s Rebecca Adams has reported extensively on this issue, noting that the IRS isn’t expected to do much to enforce the mandate anytime soon.
There are also numerous exemptions that mean 87 percent of the 30 million people who will still be without insurance will be able to avoid the tax.
That includes illegal immigrants — who aren’t eligible for Obamacare benefits — and low-income people.
The mandate penalty will rise in 2016 to a minimum $695 per uninsured adult or 2.5 percent of adjusted gross income from $95 or 1 percent this year.
It’s considered the heart of the law and key to the ban on discriminating against people with pre-existing conditions.
That’s because without it, many people would choose to wait until they are sick to buy insurance, driving up premiums. In turn, more people would forgo insurance.
Insurance companies have repeatedly argued for a robust mandate to buy insurance, warning of a death spiral without it.
The CBO had projected the law would cut the deficit significantly, especially in the second decade as provisions like a tax on “Cadillac” insurance plans start to kick in.
But as CQ Roll Call reported this week, the CBO has given up estimating the cost of the law.
The latest CBO report was requested by Sen. Orrin Hatch, R-Utah, the ranking member of the Finance Committee. He issued a statement reiterating a call for repealing the individual mandate.
Who is exempt from the fine under Obamacare for not having health insurance.
➡️ Members of a federally recognized health sharing ministry.
➡️ Members of a federally recognized Indian tribe or someone eligible to get services from an Indian care provider.
➡️ People with income below the minimum threshold for filing a tax return. They won’t have to file a return just to show they are exempt from the mandate. The need to file a federal return depends on filing status, age and income.
➡️ Those without coverage for less than three consecutive months in a year. One coverage gap exemption per year is allowed.
➡️ Someone who suffered a hardship, under federal definitions, that made him or her unable to get coverage. The list includes people who became homeless, faced financial or domestic problems, filed bankruptcy in the past six months, would have to forgo basic needs to buy health coverage, experienced the death of a close family member, got a shut-off notice from a utility company, experienced a fire or other serious disaster, suffered from domestic violence, or many other situations.
➡️ People who can’t afford coverage because the lowest insurance premium is more than 8 percent of their household income.
➡️ Someone in a jail, prison or correctional facility after conviction.
➡️ Individuals born overseas who are not citizens or in the nation legally.
➡️ People whose health plan year started in 2013. For the first year of the program, people whose health plan years are not tied to the calendar year and whose plan year started in 2013 are exempt until the 2013-14 health insurance plan year ends. For instance, if your company’s policies renewed in July 2013 but you and your spouse didn’t sign up, you’re exempt until the new plan term starts the following July.
➡️ American citizens who are not in the United States for at least 330 days within a 12-month period, or citizens who are legal residents of a foreign nation for a full year. They are counted as having met the requirement.
Do we dare ask how all this will be monitored and verified?
QUINNSCOMMENTARY 