Tags: Healthcare Reform | obamacare | exchanges | ads | penalty

Obamacare Ads Steer Clear of Discussing Penalties

Image: Obamacare Ads Steer Clear of Discussing Penalties

By    |   Monday, 11 Nov 2013 09:42 AM

The state and federal health insurance exchanges created under Obamacare are touting the benefits of coverage but largely steering clear of discussing the penalty for not signing up.

The avoidance of penalty talk is by design rather than default, reports The New York Times, noting that operators say market research has shown that consumers are more likely to respond to positive messages than to the threat of punishment.

"We feel that the carrot is better than the stick," Larry Hicks, a spokesman for Covered California, told the newspaper. "This is a new endeavor. We want people to come in and test our wares."

Officials at Enroll America, a nonprofit agency promoting the new exchanges, agreed.

Sophie Stern, a senior policy analyst for the agency, told The Times, "That doesn't mean that the penalty or the mandate isn't an important piece of the law from a policy perspective. But from a messaging perspective, this is what we find resonates best."

But there is another side to playing down the penalty: the so-called tax is difficult to enforce.

As Forbes contributor Roberton Williams explained,  "If you owe a penalty, you're supposed to pay it with your income tax return. But there's not much the IRS can do if you don't pay. They can't put you in jail or garnish your wages. In fact, about the only way the IRS can collect is if you're due a refund. They can deduct the penalty from this year's and future refunds."

"It might be that they want to be positive," Michael Cannon, director of health policy studies at the Cato Institute, told The Times, referring to exchange operators. "But it's also the case that an informed customer is not their best customer."

There is also the question of whether it would cost more to buy insurance than to pay the penalty, which in 2014 is $95 per adult, or 1 percent of income, whichever is higher, and half that for people under 18.

The website for the federal exchange, which serves 36 states, is also not directly addressing the issue.

"If someone who can afford health insurance doesn't have coverage in 2014, they may have to pay a fee," it says.  "They also have to pay for all of their healthcare."

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The state and federal health insurance exchanges created under Obamacare are touting the benefits of coverage but largely steering clear of discussing the penalty for not signing up.
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Monday, 11 Nov 2013 09:42 AM
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