Health reform implementation

CBO: 6M people will pay penalty under health law’s mandate

Roughly 6 million people will pay a penalty under the individual mandate in President Obama’s healthcare reform law, the Congressional Budget Office said Wednesday.

CBO released new figures estimating the effects of the mandate in 2016, two years after it is set to take effect. The budget office had previously said 4 million people would have to pay the penalty, but upped its estimate because it now expects more people to be unemployed.

The penalties paid will add up to about $8 billion per year, CBO said.

The penalty for going uninsured will be start off at either $695 or 2.5 percent of household income, whichever is greater. It will increase over time.

{mosads}The individual mandate requires most taxpayers to either buy insurance or pay a penalty. It was the centerpiece of the Supreme Court’s historic ruling on the healthcare law, in which the court upheld the mandate as an appropriate use of Congress’s power to levy taxes.

The Supreme Court ruling accounts for a small part of the uptick in CBO’s estimates, the budget office said. The court said states must be able to opt out of the healthcare law’s Medicaid expansion.

Assuming states opt out, millions of people will lose Medicaid as an option. Most will be poor enough to be exempt from the individual mandate, but a small percentage will have to buy private coverage or pay the fine.

A total of about 30 million U.S. residents will be uninsured in 2016, CBO said, but the vast majority will be exempt from the mandate.


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