CBO Estimates That Only 1.2 Percent of Americans Will Pay Penalty for Not Getting Health Coverage

July 2, 2012 at 2:44 pm

As we explained recently, the claim that the Supreme Court’s upholding of the individual mandate in health reform means Americans will face a massive, broad-based tax increase doesn’t square with reality.  Here’s a bit more detail on that issue.

There are two main estimates of how many people would face a penalty for failure to get coverage:  studies by the Urban Institute and by the Congressional Budget Office (CBO).  They examined the issue in slightly different ways but came to the same conclusion — namely, that the number would be extremely small.

Our earlier post focused on the Urban Institute study, which estimated the number of people who might have to pay the penalty.  The CBO study estimated that about 4 million, or just 1.2 percent of the population, will actually pay the penalty in 2016.  The other 98.8 percent already have coverage, would get coverage under the Affordable Care Act (which would make coverage affordable to many for the first time), would be exempt from the mandate, or would owe the penalty but try to evade it. (You can find the CBO figures on pages 71-73 of this report.)

And, as our previous post explained, the benefits of the individual mandate will be widespread.  To quote the Urban Institute study again:

By encouraging the currently insured healthier individuals to stay in [the individual and small group insurance] markets and attracting newly insured healthy individuals into them as well, the individual [mandate] leads to lower premiums and more stable insurance markets than would be the case without it.

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More About Paul N. Van de Water

Paul N. Van de Water

Paul N. Van de Water is a Senior Fellow at the Center on Budget and Policy Priorities, where he specializes in Medicare, Social Security, and health coverage issues.

Full bio | Blog Archive | Research archive at CBPP.org

2 Comments Add Yours ↓

Comments are listed in reverse chronological order.

  1. Harlowe Thrombey #

    Third paragraph down makes no sense to me. It’s already hard to understand even when spoken clearly. And: Will there, or will there not be…. Americans who earn between 16K and 29K a year who absolutely cannot afford health insurance of any sort, even the future subsidized ones? The first 20K a year in any person’s life, is already spent on rent/food/clothes/emergencies/auto. There’s nothing left after that. Zero.

  2. labman57 #

    Remember, conservative politicians and pundits rarely let reality get in the way of their fact-devoid rhetoric.

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