Uninsured? Pay Up!

Health care fines

Some 32 million uninsured people are expected to obtain medical coverage under the Patient Protection and Affordable Care Act. But according to the Congressional Budget Office, 21 million U.S. residents will remain uninsured in 2016. Because the law requires people to be covered, 4 million of them will pay fines. (Many of those who will not pay fines will be illegal immigrants, while others will be given exemptions due to poverty or religious beliefs.)

Supporters of the new health care law argue that the individual mandate is necessary to bring people into the system, and that the requirement would be ineffective without the fine, which will cost up to $695 in 2016 and rise with inflation after that. But health insurance typically costs much more than the fine, so many people may prefer to remain uncovered, especially since the law requires insurers to provide coverage when individuals really need it.

In Massachusetts, which passed a health insurance mandate in 2006, residents have discovered many ingenious workarounds—for example, purchasing insurance before an expensive health care procedure, then dropping it and paying fines for the rest of the year. Adding to the potential difficulty: The Internal Revenue Service, which is charged with collecting the fines, does not have the authority or the resources to force payment or to catch people who falsely claim to have insurance.