Dive Brief:
- A Kaiser Family Foundation (KFF) analysis showed more than seven million people eligible for exchange coverage would pay less in penalties than for the least expensive plan available to them.
- Although 10.5 million Americans were still uninsured as of this fall, about 2.5 million new customers bought insurance through the federal exchange since open enrollment started on Nov. 1, 2015. This figure is 29% higher than last year at the same time.
- Insurers say they need more healthy customers to balance costs of treating the sicker, elderly people who have signed up to the exchange plans.
Dive Insight:
The penalty for 2016 will be $695 per adult or 2.5% of household income, up from $325 per adult or 2% of household income last year. In 2014, the first year the penalty went into effect, an estimated 7.5 million people paid a penalty for not having insurance, averaging about $200, according to Internal Revenue Service data. Twelve million individuals qualified for exemptions because their income was low enough to have the penalty waived. If the least expensive plan available costs more than 8% of an individual's income, they are exempt from the penalty.
Many say the fine is less expensive than premiums and deductibles, which can end up costing more than $10,000. Clint Murphy, an engineer who became uninsured after leaving a job with health benefits, told The New York Times he expects to pay a $1,800 penalty rather than buy an insurance policy that costs $2,900 or more. "I don't see the logic behind that, and I'm just not going to do it. The fine is still going to be cheaper."