Millions Opt to Pay Fine, Refuse to Buy Health Insurance

Stressed young woman with hands in hair (Image Source via AP Images)

Although 2.5 million new customers bought insurance through HealthCare.Gov after open enrollment began November 1, 10.5 million people eligible to buy coverage remained uninsured, according to the Obama Administration. One salient reason for the underenrollment may be that people opt to pay the fine for remaining uninsured rather that ante up the huge sums for insurance.

The Kaiser Family Foundation conducted a study that found roughly seven million people eligible for exchange coverage would save more by eschewing coverage and paying penalties instead. The Kaiser study estimated the average penalty as $661 per uninsured household in 2015 and $969 for 2016 .

But Ben Wakana, a spokesman for the Department of Health and Human Services, protested to The New York Times that people should still obtain insurance, asserting, “We understand some people may be thinking through their choice of coverage, but going without health insurance is a serious gamble that can be catastrophic if wrong.”

The Times reported that the total cost of premiums and deductibles for healthy people could reach as high as $10,000 annually, a far cry from the $695 per adult or 2.5 percent of household income that would be levied against non-insured people in 2016.

A massive total of roughly 7.5 million Americans chose to pay the fine rather than buy insurance in 2014, the first year ObamaCare went into effect. The average fine amounted to $200, according to the Internal Revenue Service. Twelve million more people received exemptions from paying the fine because they made too little money.

The Congressional Budget Office stated in 2014:

Despite the substantial projected increases in insurance coverage under the ACA, CBO and JCT estimate that in 2024, 31 million people, or roughly one in nine non- elderly U.S. residents, will be without health insurance. In that year, about 30 percent of those uninsured people are expected to be unauthorized immigrants and thus ineligible either for exchange subsidies or for most Medicaid benefits; about 5 percent will be ineligible for Medicaid because they live in a state that has chosen not to expand coverage; about 20 percent will be eligible for Medicaid but will choose not to enroll; and the remaining 45 percent will not purchase insurance to which they have access through an employer, an exchange, or directly from an insurer.


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