For uninsured Americans, the choice of whether to purchase an ObamaCare policy or pay the penalty for not carrying coverage as mandated sometimes comes down to a choice of poisons. They’re opting either for the quick and sharp pain of the penalty or the slow process of ObamaCare that will kill their budgets over time.
We’re in the midst of a special open enrollment season for ObamaCare. That push is off to a slow start because many uninsured Americans, who are just finding out about ObamaCare’s tax penalty for the first time, still prefer to take the penalty rather then purchase an unaffordable ObamaCare plan.
We’ve reported that many families are experiencing a shock as they file their taxes as they learn about the President’s ObamaCare personal mandate and tax. Those who were uninsured in 2014 face penalties of $95, or 1% of their income—whichever is higher—when they file taxes this year. Fines will grow to $325, or 2% of income, for 2015, though millions of people qualify for exemptions. The “shared responsibility payment” or penalty was meant to be a stick to prod uninsured Americans onto healthcare plans – namely ObamaCare. However, many take the stick with instead of ObamaCare plans which are priced above the budgets of many uninsured families. A one-time penalty for many is far more affordable than a year of higher healthcare premiums.
According to a recent survey of adults, only 12 percent of uninsured people would become more likely to purchase policies if informed about the penalty. Tax preparers are reporting that customers are paying the penalty and not applying for ObamaCare health insurance during this special enrollment period.
As many as six million households may owe a penalty this tax season and the widespread ignorance about the penalty prompted the Administration to unilaterally open a special enrollment period. However, if early patterns hold true, there may not be a big bump in signups as expected. So far the Administration claims 11.7 million people have signed up on the federal and state exchanges for ObamaCare, but that number is not an accurate reflection of enrollments until they pay for their first month’s premiums. Many of those enrolled were automatically renewed by the federal government from the previous year.
The Wall Street Journal reports:
Major tax-preparation firms say many customers are paying the penalty and not getting health insurance. It is still early, since the special enrollment period launched Sunday, but research also suggests that many people who lack health insurance will pay the penalty and not get covered this year.
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At H&R Block Inc., “our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting” to pay the penalty, said Mark Ciaramitaro, a vice president of health-care enrollment services at the tax-preparation firm.
Richard Gonzalez, 59 years old, of Navarre, Fla., found out he will pay a $250 penalty for going without insurance. The retired employee of United Parcel Service Inc. said he won’t take advantage of the special enrollment period because it is cheaper for him to pay out-of-pocket for health care than to buy insurance on the exchange. He said he shopped on the exchange but would have to pay $400 a month for a plan with a $6,000 deductible.
“I think it’s wrong I have to pay the penalty,” said Mr. Gonzalez. “But it beats paying more than $10,000 a year.”
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Lackluster sign-ups during the special period mean the Obama administration may only get a small enrollment boost. About 11.7 million people have already signed up on state and federal exchanges this year, though not all of them have yet paid premiums.
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“It was a good PR move and aligns enrollment with tax season, but we’re not seeing a massive rush,” said Mark Steber, a spokesman with Jackson Hewitt Tax Service Inc. “It’s been pretty unremarkable.”
Add this the evidence from this special enrollment period to the mounting evidence that the Affordable Care Act is anything but. As we’ve contended, without taxpayer subsidies ObamaCare plans have failed to deliver coverage that Americans can afford. That’s what happens when government gets into the business of providing healthcare rather than healthcare reform.
If the subsidies are invalidated by the Supreme Court this year, the Administration will face a real quandary as suddenly those even more unaffordable plans will become even more unwanted, driving away young and healthy Americans who are paying the costs for older and sicker Americans.
The pernicious affects of ObamaCare continue to keep us chained to a law that arguably does more harm than good. We wanted healthcare reform that is empowers patients and encourages innovation in medicine. We got a healthcare plan that most of us can’t afford on our own. Perhaps the lackluster enrollment period and the potential invalidation of ObamaCare federal tax subsidies will open the door to improvements in our nation’s health policies and beyond the political stalemate.