4 million likely to pay health fine

By Kim Dixon

WASHINGTON (Reuters) – About four 4 million people in the United States could be fined for failing to buy health insurance when the health overhaul law is fully in force in 2016, the Congressional Budget Office forecast on Thursday.

Most individuals must buy health insurance under the landmark legislation passed by Congress last month, or face fines that will be phased in. By 2016, those without coverage may be fined up to 2.5 percent of their income.

The majority of the 21 million expected to lack insurance in 2016 will likely avoid penalties, the CBO, a nonpartisan arbiter of budget issues, said in an analysis of the overhaul, a cornerstone of President Barack Obama’s domestic agenda.

Of the estimated 4 million who will, some 9 percent will be under the poverty line — $11,800 in annual income for an individual and $24,000 for a family of four, said the CBO, which analyzed expected compliance rates.

The U.S. population is about 309 million, according to the Census Bureau.

The CBO also forecast the government would collect about $4 billion annually from related penalties between 2017 and 2019.

Republicans, who opposed the legislation, said the analysis showed that the bill was a tax that will hurt some poor people. “There is a price for not participating and people will pay it,” Republican Senator Chuck Grassley said in a statement.

Democrats called the numbers unsurprising and said that those paying penalties amounted to 1.5 percent of the population.

White House spokesman Nick Papas said the analysis was consistent with earlier findings, and confirmed that many more Americans will get insurance under the plan.

“CBO’s analysis confirms that the vast majority of uninsured Americans will find health care affordable and choose to participate,” he said in an e-mailed statement.

The legislation aims to expand coverage to about 32 million out of about 46 million uninsured Americans. Obama signed it into law after it passed both houses of Congress despite unanimous opposition from Republicans, the minority party.

The rationale for requiring individuals to buy insurance is that coverage will be more affordable if more are in the risk pool, and that the uninsured basically get free care in emergency rooms, which adds to overall healthcare costs.

The new law waives insurance premiums for those with very low incomes as well as some other groups, while subsidies are provided to help poorer people buy coverage.

It also requires states to set up exchanges to allow individuals and small groups to shop for insurance, although 20 states have sued the federal government in an attempt to block the restructuring.

To collect penalties the Internal Revenue Service is considering withholding tax refunds since it cannot seize assets or levy fines, the IRS commissioner said recently.

(Editing by Paul Simao)