Nearly 4 million Americans will have to pay a penalty if they fail to get health insurance when that element of President Barack Obama’s health care overhaul law kicks in, according to congressional projections released Thursday.
The penalties will average a little more than $1,000 apiece in 2016, the Congressional Budget Office said in a report.
The vast majority of people paying the fine will be middle class, which would violate Obama’s 2008 campaign pledge not to raise taxes on individuals making less than $200,000 a year and couples making less than $250,000.
Republicans have criticized the penalties, even though the idea for a mandate was originally proposed by Republicans in the 1990s and is part of the Massachusetts health care plan signed into law by then Gov. Mitt Romney, a Republican, in 2006. Attorneys general in more than a dozen states are working to challenge the mandate in federal court as unconstitutional.
Democrats argue the mandate and the penalties are a necessary part of a massive overhaul designed to expand coverage to millions who now lack it. They point out that getting young, healthy Americans in the insurance pool will reduce costs for others.
Americans who don’t get qualified health insurance will be required to pay penalties starting in 2014, unless they are exempt because of low income, religious beliefs, or because they are members of American Indian tribes. The penalties will be fully phased in by 2016.
About 21 million nonelderly residents will be uninsured in 2016, according to projections by the CBO and the Joint Committee on Taxation. Most of those people will be exempt from the penalties.
Under the new law, the penalties will be phased in starting in 2014. By 2016, those who must get insurance but don’t will be fined $695 or 2.5 percent of their household income, whichever is greater.