CBO Thinks Millions Of Americans Aren't Going To Sign Up For Obamacare

Tyler Durden's picture

Submitted by Robert Murphy via Mises Canada,

In June the U.S. Congressional Budget Office (CBO) updated its forecasts regarding the “individual mandate” component of the Affordable Care Act (ACA), also known as “ObamaCare.” Recall that the individual mandate is the tax levied on Americans who commit the outrage of refraining from buying health insurance. You can click the link for the full list of the (ascending) fine structure, and the list of exemptions. But in this post I want to draw your attention to a shocking table from the CBO report:

CBO on Individual Mandate

Let’s walk through some of these numbers, all of which refer to CBO’s estimates for Calendar Year 2016. (The penalties would actually be assessed in 2017 when these people pay their CY 2016 taxes.) First of all, the “3.9″ at the bottom of the first numerical column says that 3.9 million people will actually pay the relevant penalty to the government. (Earlier in the document CBO explains that some people will not have health insurance, and will not be eligible for an exemption, but may simply evade their legally owed tax payment.)

Keep in mind that this figure includes dependents on behalf of whom others might actually make the payment. For example, if a family of 4 decides to forego health insurance altogether and does not qualify for the poverty exemption, then the person filing income taxes for the family has to pay the penalties because of everybody. But that family would show up as 4 people in the 3.9 million total, not 1 person.

However, one of the notes under the table (not shown above) explains: “Individual penalty payments are classified by the income of the tax-filing unit.” So in our example, if the head of household earns $100,000, while the 5-year-old twins earn $0, then–my understanding is–each of the 4 going into the total calculation would be classified as having an income of $100,000 for the purposes of the above table.

Finally, note that the poverty level is defined in this way: “In 2016, the federal poverty guidelines (commonly referred to as the federal poverty level) are projected to equal about $12,150 for a single person and about $24,750 for a family of four.”

Now that we have an idea of what the table shows, here are some fun facts:

==> In total, the government expects to collect $4.2 billion in one year from individuals because they don’t have health insurance.

 

==> 1 million people who earn less than twice the poverty level will be fined for not having health insurance in 2016.

 

==>  This group of people–earning less than twice the poverty level–accounts for 25% of those who will be fined.

 

==> The government will extract $500 million in penalties from this group. These people are too poor to buy health insurance, remember.

 

==> Drilling down further, 200,000 people will be fined who earn less than the poverty level. These 200,000 people whom the government says are living below the poverty level will be forced to pay the IRS a total of $100 million in fines just for 2016. They also will not have health insurance, remember.

What is not shown in the above table–though the report itself explains–is that the total number of nonelderly uninsured Americans projected for calendar 2016 is some 30 million. This figure includes illegal immigrants and people who are exempt for various reasons from the mandate.

Isn’t it interesting that the “universal coverage” provided by the “Affordable Care Act” will still yield–according to the government’s own projections–almost 4 million Americans who will prefer to pay an average tax of more than $1,000 to the government for 2016, rather than buying health insurance that year?