federal report estimates about 6 million people will pay a
penalty because they are uninsured in 2016, a figure that includes uninsured
dependents who have the penalty paid on their behalf. Total collections will be
about $7 billion in 2016 and average about $8 billion per year over the
The penalty will be the greater of a
flat dollar amount per person that rises from $95 in 2014 and $325 in 2015 to $695 in 2016 and is
indexed by inflation thereafter (the penalty for children will be half that
amount and an overall cap will apply to family payments) or a percentage of the
household's income that rises to 2.5% for 2016 and subsequent years (also
subject to a cap).
The Congressional Budget Office (CBO)
and the Joint Committee on Taxation (JCT) estimate that about 30 million
nonelderly residents will be uninsured in 2016, but the majority of them will
not be subject to the penalty tax. Unauthorized immigrants, for example, who
are prohibited from receiving almost all Medicaid benefits and all subsidies
through the insurance exchanges, are exempted from the mandate to obtain health
insurance. Others will be subject to the mandate but exempted from the penalty
tax—for example, because they will have income low enough that they are not
required to file an income tax return, because they are members of Indian
tribes, or because the premium they would have to pay would exceed a specified
share of their income (initially 8% in 2014 and indexed over time). CBO and JCT
estimate that between 18 million and 19 million uninsured people in 2016 will
qualify for 1 or more of those exemptions.
Of the remaining 11 million to 12
million uninsured people, some individuals will be granted exemptions from the
penalty because of hardship, and others will be exempted from the requirement
on the basis of their religious beliefs.
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