June 13 2014

One Million Poor Americans to Pay ObamaCare Fine

Patrice J. Lee

ObamaCare will hit millions of Americans squarely in the pocket because they don’t carry health insurance coverage. Of those, one million are low-income Americans, who probably can’t afford to take the hit.

The Congressional Budget Office (CBO) released a report last week that estimates four million Americans will pay the individual mandate penalty for not carrying healthcare coverage by 2016. The federal government will collect about $4 billion in 2016 and on average $5 billion per year from 2017-2024.

The poor will not escape. Of the four million Americans expected to pay the penalty, some 200,000 earn less than 100 percent of the poverty line and 800,000 earn between 100 and 199 percent of the poverty level – designating them as low-income. At the end of the day, millions of Americans will still remain uninsured according to the CBO.

As a reminder, anyone who does not carry coverage this year will be hit with a bill for $95 or one percentage of their household’s adjusted gross income (whichever is greater). That jumps to $695 or 2.5 percent of adjusted gross income in 2016 and will be indexed to inflation after that. Kids aren’t exempt either; the penalty for a child is half the amount for adults. The government will rake in $46 billion from these penalties for fiscal years 2015 to 2024.

The Free Beacon reports:

President Barack Obama was once critical of an individual mandate precisely because of its effect on low-income Americans. During a primary debate against Hillary Clinton, then-candidate Obama criticized the idea of a mandate for imposing fines on people who could not afford health insurance.

“You can have a situation, which we are seeing right now in the state of Massachusetts, where people are being fined for not having purchased health care, but choose to accept the fine because they still can’t afford it even with the subsidies,” he said. “They are then worse off, they then have no health care and are paying a fine above and beyond that.”

“The central promise of the new health care law was that by bringing down the cost of insurance and making it more affordable, virtually all Americans would have good health insurance at reasonable rates,” said Daniel Garza, executive director of the LIBRE Initiative, a nonprofit organization devoted to economic freedom for Hispanic Americans.

“Instead, 30 million Americans will be uninsured,” he said. “And four million will pay tax penalties for not complying with the law.

“Moreover, this administration has hit a new low by penalizing 200,000 of America’s most needy,” Garza said.

As the Free Beacon highlights, the President reportedly was  never a fan of mandates because they affect low-income people worse than middle and high-income earners. However, he knew the un-Affordable Care Act would not be popular on its own so he added that requirement to drive more Americans to ObamaCare.

ObamaCare was supposed to reduce our national expenses on healthcare and individual healthcare costs. Most important, it was billed as the solution to the problem of uninsured Americans using emergency rooms as their source of primary care. Four years after passage of ObamaCare, these goals have yet to be achieved, but a lot of unintended consequences have occurred. Millions of Americans lost their healthcare coverage, employers have cut worker hours or forgone hiring, healthcare insurance costs have risen for many employers and providers, and many individuals are paying more for the same or worse coverage.

Manny Americans have been quiet on ObamaCare, perhaps because it hasn’t hit them. Just wait until next year and subsequent years when they see their tax returns eaten up by this penalty or experience increased premiums and deductibles.

ObamaCare remains unpopular among a (slim) majority of Americans. As we continue to experience the impacts of the law, that slim majority can easily widen. It’s a costly lesson that government is not the solution to our social and economic problems. It can play a role, but broad, sweeping legislation meant to transform entire industries is a recipe for disaster not a prescription for success.

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