One of the hallmarks of The Affordable Care Act was the penalty that would be imposed by the IRS on anyone that did not have health insurance. It has been slowly phased in over the last several years with the penalty in 2016 set to be $695 or %2.5 of income for a single adult whichever is larger. Despite this steep cost, many have opted to forgo healthcare because the subsidy they qualify for does not cover cost of the premium which makes paying the penalty plus medical expenses out of pocket cheaper. In addition, some have stated that the benefits offered by the plan were minimal, particularly when deductibles are included, aside from some limited allowances for preventative care. But it is a relatively thin slice of the population that find themselves in this position since higher earners have access to higher quality and cheaper health care options and those with lower incomes are able to file for an exemption which prevents the imposition of the penalty. While people in this situation are a minority, it remains to be seen how the government will react to the holdouts since forcing people into paying insurance premiums was a key ingredient in making the ACA work. Let us hope the solution is a reasonable one.
See Abby Goodnough, Many See I.R.S. Penalties as More Affordable Than Insurance, The New York Times, January 3, 2016
