Tags: Healthcare Reform | WSJ | Obamacare | Healthcare | Obama administration | fines

WSJ: Millions Won't Pay Obamacare Fines Due to Exemptions

By Drew MacKenzie   |   Thursday, 07 Aug 2014 11:06 AM

The vast majority of Americans who don't have healthcare coverage under Obamacare can avoid federal fines due to the expanding number of exemptions, The Wall Street Journal reported.

Nearly 27 million people, out of the 30 million uninsured, will not be penalized because they qualify for one or more exemptions in the Affordable Care Act, according to a report by the Congressional Budget Office and the Joint Committee on Taxation.

The Obamacare guidelines allows 14 possible ways that people without insurance are allowed to avoid the fines. The exemptions are based on hardship cases, such as domestic violence victims and those who have had their previous health plan canceled or people who have suffered serious property damage from a fire or flood.

There are also exemptions for such groups as illegal immigrants, members of Native American tribes and some religious organizations, the Journal said.

The report estimated that around 4 million uninsured will face the Obamacare fine in 2016, a third less than its earlier projection of 6 million.

The number has also partially been reduced by the 21 states declining to expand the Medicaid insurance program under the healthcare act, which means that their residents may be exempt from the penalty, according to the newspaper.

The increasing number of people, nearly 90 percent, who can opt out of health coverage without a fine is a growing concern for insurance companies that were banking on the so-called individual mandate to force young and healthy Americans to sign up.

The insurers are worried that without fines young adults will risk not being covered for financial reasons, leaving a majority of elderly and infirm on the books, which will lead to a rise in premiums.

Patrick Getzen, vice president at Blue Cross and Blue Shield of North Carolina, said the percentage of "older and sicker people" enrolled in 2014 was greater than estimated.

While blaming the increase in part on the availability of exemptions, he said, "With a stronger penalty and less broad exemptions, that would be better for the risk pool."

The Obama administration fought for the individual mandate in front of the Supreme Court in 2012 when it claimed that the fine for not being insured was a vital part of the act. Although the court approved the penalty saying it was a tax, the GOP has recently claimed that all the exemptions mean that the mandate is pointless.

Douglas Holtz-Eakin, former director of the Congressional Budget Office and president of the American Action Forum, a conservative think tank, said, "If your pajamas don't fit well, you don't need health insurance. It basically waives the individual mandate."

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