SICK: Americans Paid $1.7 Billion in ObamaCare Penalties in 2014

Remember when ObamaCare passed without a single Republican voting for it and then House Leader Nancy Pelosi (D-Calif.) famously said: We have to pass the bill so that you can find out what is in it? Well, it’s been six long years since the bill was signed into law and once again, we are finding more and more surprises contained within the law’s more than 20,000 pages.

For instance, it turns out nearly 8.1 million Americans paid $1.7 billion in penalties in 2014, or an average of $210 per tax return in 2014 for not having health insurance and $200 million more than the IRS initially predicted.

One of the caveats of ObamaCare which made the penalties possible is the individual mandate, which requires everyone to have insurance or pay a fine. The IRS set a fine of $96, or 1 percent of reported gross income, whichever is greater in 2014. You may say $96 is nothing because you can do that standing on your head, however, the penalty increases to a flat payment of $695, or 2.5 percent of gross income in 2016, the Congressional Budget Office said in 2014. After this year, the penalty will be tied to inflation.

Over the summer several Republican senators, including Sen. Kelly Ayotte (R-N.H.) proposed the “Obamacare Tax Relief and Consumer Choice Act,” which abolishes the individual mandate if insurance premiums continue rising.

“Our bill would exempt people from the law’s individual mandate to purchase health insurance if their plan’s premiums increase by 10 percent or the average of their home state’s premiums increase by more than 10 percent,” said Sen. Ayotte.

“ObamaCare has failed,” Sen. Tom Cotton (R-Ark.), another co-sponsor of the bill, said.

“Premiums are skyrocketing by more than 50 percent in some states, deductibles average more than $5,000 for the cheapest plans, and networks are shrinking,” he said. “Even worse, many of those same families will face a massive tax penalty because they can’t afford care.”

Devon Herrick, Ph.D., an expert on 21st century medicine, including the evolution of Internet-based medicine, consumer driven health care and key changes in the global health market, told Daily Surge there are other alternatives to the ObamaCare penalties.

“According to the Congressional Budget Office estimate, something like 80 percent of individuals lacking coverage would be exempt from the penalty,” he said. “Many of those paying the fine actually could get a waiver if they took the time and knew how to apply. Basically, people are paying the fine rather than paying for high-priced coverage they believe has little value to them.”

Herrick agrees with Sen. Cotton, pointing to the fact so many people prefer to pay the fine as proof Obamacare is failing.

“Only those who expect to get more out of Obamacare than they put in are signing up — this is called adverse selection, which is accelerating the implosion of the exchange plans,” he said.

He says fines that increase are supposed to induce people to enroll in coverage, but premiums and deductibles are also going up, so it’s probably a wash.

“Trump cannot abolish Obamacare if he becomes president,” he said. “Congress will have to debate and pass a replacement before the next president can sign the bill.”

He says Republicans already have a replacement framework, although not all the details are set.

According to Herrick, the GOP generally wants:

  • Tax credits for those who lack coverage through their jobs.

  • Insurers would be able to design plans Americans want to buy and insurers would be able to charge premiums based on risk.

  • Consumers would be protected from being kicked off the rolls by provisions guaranteeing renewability for those who maintain continuous coverage.

  • Medicaid would be a block grant program allowing each state to experiment with different types of coverage.

  • High risk pools would assist those who have pre-existing conditions.


Kenneth Artz

Kenneth Artz

Kenneth Artz is a news reporter for The Heartland Institute, covering health care, energy and the environment, education, and budget & tax news. He has over 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy, and has worked as a newspaper reporter for several papers in Texas, and as a writer/editor for the National Center for Policy Analysis.

Posting Policy

We have no tolerance for comments containing violence, racism, vulgarity, profanity, all caps, or discourteous behavior. Thank you for partnering with us to maintain a courteous and useful public environment where we can engage in reasonable discourse. Read more.

Facebook Comments





Disqus Comments


Trending Now on Daily Surge

Send this to friend