Tax Penalty to Hit Nearly Six Million Uninsured People
September 21, 2012
Nearly six million Americans -- significantly more than first estimated-- will face a tax penalty under President Barack Obama's health overhaul for not getting insurance, according to a new report from the nonpartisan Congressional Budget Office (CBO). Most would be in the middle class, says the Associated Press.
- The numbers from the CBO are 50 percent higher than a previous projection by the same office in 2010, shortly after the law passed.
- The earlier estimate found four million people would be affected in 2016, when the penalty is fully in effect.
That's still only a sliver of the population, given that more than 150 million people currently are covered by employer plans. Nonetheless, in his first campaign for the White House, Obama pledged not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
- The budget office analysis found that nearly 80 percent of those who will face the penalty would be making up to or less than five times the federal poverty level.
- Currently that would work out to $55,850 or less for an individual and $115,250 or less for a family of four.
- Average penalty: about $1,200 in 2016.
- The budget office said the penalty will raise $6.9 billion in 2016.
The budget office said most of the increase in its estimate is due to changes in underlying projections about the economy, incorporating the effects of new federal legislation, as well as higher unemployment and lower wages.
Source: Ricardo Alonso-Zaldivar, "Tax Penalty to Hit Nearly 6M Uninsured People," Associated Press, September 19, 2012. "Payments of Penalties for Being Uninsured Under the Affordable Care Act," Congressional Budget Office, September 2012.
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