6 Million Will Pay Insurance Penalty in 2016

Experts expect that six million Americans will have to pay a penalty for not buying health insurance. That number has been revised up from the initial estimate of four million.

A report by the Congressional Budget Office (CBO) estimated that six million Americans will be a total of $7 billion in 2016 for failing to get insurance as required by President Barack Obama’s Affordable Care Act.

Although six million people will be subject to pay the penalty, the CBO estimated that a total of 30 million nonelderly residents will be uninsured in 2016. However, 24 million will not be subject to pay the penalty tax.

Exemption examples

Unauthorized immigrants — prohibited from receiving almost all Medicaid benefits and subsidies through insurance exchanges, they are exempt from the mandate to obtain health insurance.

Low income — residents with low enough income will not be required to file an income tax return. Residents can also be exempt if the premium they would have to pay would exceed the specified share of their income (8% initially).

American Indians — members of Indian tribes are exempt from the penalty tax

According to the CBO and the staff of the Joint Committee on Taxation (JCT), 24 million Americans will either qualify for at least one of those exemptions or they will be granted an exemption from the penalty because of hardship or an exemption from the requirement because of their religious beliefs.

In April 2010 the CBO and JCT originally estimated only four million Americans would have to pay the penalty, which would only result in $4 billion of collections. A small part of that increase stems from the Supreme Court ruling that states were not required to expand Medicaid coverage, and those decisions by states will likely increase the number of uninsured.

In 2016 the penalty would be $695 or 2.5% of a household’s income, whichever is larger. Of course, a big part of this all depends on who wins the November election.