Even with an extended sign-up period and the threat of a penalty, many Americans are passing on insurance. Obamacare originally required citizens to purchase insurance by February 15, 2015, or pay a penalty this tax season for non-coverage. But last month the administration created a special enrollment period that gave the uninsured until April 15th to purchase insurance. The WSJ reports, however, that this extra time might not make that much difference:
Only 12% of uninsured people would buy policies if informed of the penalty, according to a survey of 3,000 adults polled through Feb. 24 by McKinsey & Co.’s Center for U.S. Health System Reform.At H&R Block Inc., “our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting” to pay the penalty, said Mark Ciaramitaro, a vice president of health-care enrollment services at the tax-preparation firm.
Who are these uninsured people opting for the penalty? It’s an important question. On the one hand, they might too sick or poor to afford insurance. Many of these people are exempted from the penalty if they live in states that did not expand Medicaid, but not all. Because they use lots of uncompensated care, these people, ACA advocates claimed, are a drag on the medical system as long as they remain uninsured. So if they’re opting for the penalty instead of insurance, that could be bad news for the system as a whole. On the other hand, these could be people who are healthy and feel like they don’t need insurance—in which case their decision to stay out of the insurance pools could make premiums more expensive.Either way, it’s not great news for the administration, and it doesn’t help that the ACA forbids the IRS from applying fines or liens to those who don’t even pay the penalty. Generous estimates of the law peg the number of people it has insured at around 16 million—though that number doesn’t capture how many previously uninsured Americans got insurance through the ACA specifically. But all that aside, if the remaining uninsured are opting for the penalty over insurance, it’s unlikely to climb much higher.