Under the Christmas tree for millions of Americans will be a gift from Uncle Sam. They can’t open it until after the new year, but it won’t be worth the wait!
Uninsured Americans who didn’t carry insurance coverage in 2015 will face a tax bill of at $325 per adult, or 2 percent of their adjusted gross income. This is a bill they can’t just toss in the trash and forget about either. Remember, the IRS processes your tax returns.
The penalty will be even steeper next year as the penalty jumps to $695 per adult, or 2.5 percent of household income. For a household of two adults that’s enough for a vacation or some much-needed repairs to the house. It amounts to a month's rent for many Americans.
For 2017, uninsured Americans will fork over a whopping $969 per person. That’s a major financial burden imposed by an administration that claims to be fighting for working families.
So far, the penalties have not been high enough to force Americans into ObamaCare, especially young people, but as new report from healthcare research organization, the Kaiser Family Foundation, finds that may change this year and especially next year.
According to their research of uninsured individuals in early 2015, the average household penalty is $661, but that will jump to $969 for next year.
Some 11 million people remain uninsured, but more than 7 million would pay more money if they bought the cheapest ObamaCare plan available. It’s no wonder so many of them skipped the enrollment line and are opting to pay the fine. That’s expected to change though as that penalty increases.
Uninsured households that would qualify for Obamacare subsidies to help pay for coverage face an average fine of $738 — nearly double the $389 average for this year.
"It's a substantial increase," said Larry Levitt, senior vice president at the Kaiser Family Foundation, about the higher average fines.
The report underscores what Kaiser called "a key area of uncertainty": The extent to which higher Obamacare penalties will prod uninsured people to sign up for coverage. More sign-ups in turn could strengthen the financial situation of health plans being sold on government-run exchanges. Open enrollment in Obamacare plans is going on now, and will end Jan. 31.
Obama Administration officials are looking forward to tax season when uninsured Americans will be shocked into buying insurance. They hope that this will provide a big boost in enrollments that would stabilize the flailing healthcare system’s spiraling costs.
That’s a lot of hoping, and there’s no guarantee. Research by the Robert Wood Foundation last year, found that only about 25 percent would enroll to avoid the fine.
ObamaCare hasn’t improved access to affordable healthcare as the President promised of his signature legislation. The uninsured are faced with sticker shock over the monthly premiums and the high deductibles if they purchase it (even with generous taxpayer subsidies) or staggering penalties if they avoid.
On the heels of a new CBO report this week that ObamaCare will shrink the workforce by 2 million people, this new analysis compounds bad news for the president’s legacy.