Many taxpayers decided last year to accept a tax penalty rather than pay the costs for having insurance, and will likely do the same this year even though a special enrollment period has opened to allow people who discover they owe a fine to sign up through April.
"our analysis indicates that a significant percentage of taxpayers whose household members were not covered for at least a portion of 2014 are opting" to pay the penalty, Mark Ciaramitaro, a vice president of health-care enrollment services for H&R Block, told
The Wall Street Journal.
According to the healthcare reform law, most Americans face a fine at tax time unless they obtain coverage. This year's enrollment period ended on Feb. 15, but even with the
special enrollment period that launched this past Sunday, it still may make little difference in the enrollments.
A survey of 3,000 adults finished in February showed that only about 12 percent of those who are uninsured would buy policies if they learned about the penalty, according to McKinsey & Co.'s Center for U.S. Health System Reform.
About 11.7 million have already signed up for insurance through federal and state exchanges this year, but federal officials believe as many as six million households could still owe a penalty for not obtaining insurance. However, officials have not said how many of those will sign up for coverage in the special enrollment period.
The period applies to people who have owe a penalty for going without coverage last year and expect another penalty for this year. If they get insurance, they still will owe fines for 2014, but they won't incur any more penalties.
The fines are also growing this year. People who were uninsured last year faced a fine of $95 or one percent of their income, whichever number was higher. But in 2015, the fines grow to two percent, or $325.
There may be another ugly surprise from last year. H&R Block estimates that up to half of the seven million people who got subsidies to pay for their coverage last year could have to refund money.
As the subsidies are based on projections of income, some people estimated wrong and got too much money, and could either take a hit on their tax refunds or have to pay the government back — and tax experts say that issue won't be going away, because the system still depends on consumers' projections.
In addition, because many people were automatically renewed by the government for coverage, their calculated subsidies may be too high, If they made more income last year, the government may still be calculating their subsidies on their original lower income estimate.
"These flawed income projections can just perpetuate because so many people were auto-renewed. That concerns me from a policy standpoint," Tara Straw, a health-policy analyst at the Center on Budget and Policy Priorities, told The Wall Street Journal. "If it was wrong for 2014, it will be wrong for 2015."
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Sandy Fitzgerald ✉
Sandy Fitzgerald has more than three decades in journalism and serves as a general assignment writer for Newsmax covering news, media, and politics.
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