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1000 Reasons to Dodge the Obamacare Tax


When Obamacare’s exchanges go live this fall, uninsured Americans will have the choice of either purchasing coverage on an exchange or paying a penalty. We’ve known that the penalty was less than the cost of insurance, but as far as we know there hasn’t really been a systematic attempt to quantify the difference (just how many people will save just how much money).

new study from the National Center for Public Policy Research does just that, and it finds that three million young Americans (ages 18-34) would save a least $1,000, post-subsidy, by opting to pay the penalty instead of signing up for insurance. Overall, 3.7 million youth would save at least $500. Investor’s Business Daily:

[NCCPR analyst David] Hogberg cites the example of an uninsured 22-year-old earning $18,100 a year. Under ObamaCare, she’d be eligible for $1,329 in subsidies. But she would likely save $117 if she paid the fine and remained uninsured. “I could easily use that money for groceries or transportation,” she’s quoted as saying.

As a result, ObamaCare is likely to come up well short of the 2.7 million young people the administration figured it would need to sign up in the exchanges next year in order to make them work, the study concluded.

The center that authored this study describes itself as conservative, so its findings might have to be taken with a grain of salt. Moreover, other pundits have noted that there are other reasons a 20-something might purchase insurance, even if the strict financial incentives don’t line up. The penalty will go up in coming years, and many people value health insurance and might want to purchase it anyway.

Still, this study is a solid attempt to tease out a huge incentive at work in the law, and the results should have ACA supporters nervous. The Obama administration can only hope and pray that the reasons to comply with the law trump the significant savings from taking the penalty. Right now, it seems like a toss-up.

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  • Jacksonian_Libertarian

    What if everyone just decides they would rather go to jail than continue to be robbed by Big Government?

  • Boritz

    If a health care system is administered as if the administrators care more about police powers than about health care should the discussion at some point focus on the exercise of power as the main story?

  • Rich K

    Exactly WHAT reasons are there to comply? The law has no enforcement provision except what the IRS is trying to end run around with regs which take the effect of a law. If a person does their taxes returns efficiently and has no refund coming the IRS will have nothing to confiscate in order to collect said penalty because they are not allowed to charge penalties and fees in order to collect it.Any single person who plays along is just a fool or actually needs health insurance because this penalty scam is a joke.

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