CBO Estimate: 4 Million Could Pay Health Insurance Penalty By 2016

The Associated Press: "Nearly 4 million Americans will have to pay a penalty if they fail to get health insurance when that element of President Barack Obama's health care overhaul law kicks in, according to congressional projections released Thursday." According to a Congressional Budget Office report, the average penalty in 2016 will be slightly more than $1,000 and the majority of people who pay the fine will be middle class. "About 21 million nonelderly residents will be uninsured in 2016, according to projections by the CBO and the Joint Committee on Taxation. Most of those people will be exempt from the penalties." In 2014, penalties will begin to be phased in and by 2016, "those who must get insurance but don't will be fined $695 or 2.5 percent of their household income, whichever is greater" (Ohlemacher, 4/22) .  

The Washington Post/Reuters: "Most individuals must buy health insurance under the landmark legislation passed by Congress last month, or face fines that will be phased in." But "[t]he majority of the 21 million expected to lack insurance in 2016 will likely not face the penalties. ... Of the estimated 4 million who will, about 9 percent will be under the poverty line..." The CBO's estimate is based on an analysis of expected rates of compliance with the new law. As a mechanism to collect the penalties, the Internal Revenue Service "is considering withholding tax refunds since it cannot seize assets or levy fines" (4/22).