April 17 2014
Pay Now or Pay Later, But You Better Pay Up
Patrice J. Lee
Nothing changes behavior like government penalties. To ensure that every American carries healthcare coverage, ObamaCare adds a penalty against non-coverage. In essence, ObamaCare has criminalized being uninsured and as we reported yesterday, the government is throwing isn’t resources behind IRS enforcement.
Will it work? Indications are that it will.
If you do not carry healthcare coverage you face a penalty of $95 per adult and $47.50 per child (up to $285 for a family) or 1% of your taxable income, whichever is greater. This penalty will rise over the next few years to $695 per person. A new Gallup poll finds that as the tax penalty for not carrying healthcare coverage (through the ObamaCare exchanges or a private plan), the numbers of Americans who opt to go without healthcare drops and that drop is precipitous.
Gallup reports its findings:
Uninsured Americans' likelihood of signing up for insurance differs depending on the amount of the fine they would have to pay for not carrying insurance. At a hypothetical $95 fine level, uninsured Americans are as likely to say they would not get insurance (46%) as to say they would (47%). At a $500 fine level, the percentage saying they would get insurance jumps to 60%, but this percentage levels off at a $1,000 fine level at 62%.
Across the various fine levels, adults with excellent or very good self-reported health are less likely to say they would sign up for health insurance than adults with poorer health. However, increasing the fine does increase the likelihood that healthier adults will enroll in a plan. At the $1,000 level, a solid majority of Americans in all health groups measured report being more likely to sign up for insurance than paying the fine.
The increase in the Affordable Care Act fine next year to a minimum $325, or 2% of one's yearly household income, could compel a significant amount of still-uninsured Americans who did not sign up during the open enrollment period to do so in 2015. This increase could begin to taper off between the 2015 and 2016 tax years if the average fine moves between $500 and $1,000. At this point, there is a distinct possibility that the growth in the insurance coverage rate will either slow down or stall based on expected future fine levels.
These findings should not be too surprising. The architects of ObamaCare knew that Americans would not be attracted sufficiently to the President’s signature healthcare plan to sign up, so they would have to force people onto it. Then as the numbers of uninsured drop they can claim ObamaCare is a success. What an interesting way of claiming victory.
What Americans have lost as a result of the individual mandate is the freedom to choose what they do with their bodies. Securing healthcare coverage is responsible behavior. However, shouldn’t it be the right of individuals to choose to do so? Before, ObamaCare there were many options Americans had to choose from that met their price points. Many of those options have been eliminated and the Administration’s usage of the press to promote ObamaCare as the big game in town may leave Americans with the perception that ObamaCare is the only option. We know ObamaCare is in fact a bad deal for Americans –especially young Americans- and we’ll continue to be a voice of reason on this point.
What this experiment in tampering with the healthcare insurance industry demonstrates is that our government knows how much Americans want to be left alone. ObamaCare still remains unpopular among a majority of Americans. That doesn’t matter though to the Administration, which demands that everyone comply.
It’s common for a few individuals to use force or the threat of force against others to coerce a specific behavior such as paying for protection or to operate a business. We call that extortion.
What should we call it when the purveyors of coercion are IRS agents and the big boss driving the coercive force sits in the White House?