PENALTIES FOR NO INSURANCE
October 28, 2009
Will individuals that don't get health insurance be penalized under any new health care reform, asks the Associated Press (AP)?
President Barack Obama did not propose penalties for people who don't get health insurance as a candidate, but he now supports an individual mandate as long as waivers are available for those for whom it would be a hardship. Republicans say the penalties, which are referred to as taxes in congressional documents, would violate Obama's campaign pledge not to increase taxes on families making less than $250,000 a year.
All the health care reform plans under consideration would prohibit insurance companies from denying coverage to people because of pre-existing medical conditions. Many Democrats say penalties are needed to prevent people from going without insurance until they get sick:
- The Senate Finance Committee bill would start phasing in fines for individuals who don't get insurance in 2014, with the fines reaching $750 in 2017.
- The House plan would fine individuals 2.5 percent of their modified adjusted gross income, up to the cost of the average national premium for basic coverage.
How would fines be administered?
- The IRS would collect the fines through tax returns; failure to pay federal taxes can result in criminal charges, though it rarely does unless fraud is involved.
- However, the Senate Finance Committee bill specifically prohibits criminal penalties.
Source: Stephen Ohlemacher, "Penalties for No Insurance," Associated Press/Townhall.com, October 27, 2009.
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