Policy model estimates few would be subject to individual mandate penalties

While the U.S. Supreme Court hears arguments this week on the constitutionality of the individual mandate, new analysis from the Urban Institute shows that the requirement for all people to have health insurance or face a fine, would not affect 94 percent of the population.

The analysis, funded by the Robert Wood Johnson Foundation, found only 6 percent of the total U.S. population could be subject to penalties for not purchasing health insurance in 2014.

“The analysis shows that while a small number of people would be directly affected by the individual responsibility requirement, the overall benefit to the population would be large,” said Linda J. Blumberg, lead analyst of the Urban Institute, in a press release. “Insurance markets would be more stable and premiums for insurance that people buy themselves would be 10 to 20 percent lower than without a mandate.”

The Urban Institute’s Insurance Policy Simulation Model estimated the figures for those potentially subject to the mandate. It identified current insurance status, and then simulated the eligibility for Medicaid, exchange-based premiums, subsidies available to purchase insurance on the exchanges, as well as the total number of people currently covered by health insurance.

The analysis showed that 33 percent of the U.S. population under age 65 would be explicitly exempt from the individual responsibility requirement, most because their incomes fall below the tax-filing threshold. Most of these people already have health insurance through an employer, the private market or public coverage programs.

Of those with incomes above the threshold, 58 percent under age 65 are potentially subject to the individual responsibility requirement but are already insured through an employer, the individual market or public coverage programs and, therefore, would not face penalties.

Three percent of the U.S. population who are under age 65 are uninsured and potentially subject to the individual responsibility requirement would be eligible for Medicaid, so they could receive coverage at no or low cost and not face penalties.

Four percent who are uninsured would be eligible for exchange subsides to obtain insurance. Using the subsidies would prevent them from facing penalties, though they would face a penalty if they didn’t change their insurance status.

Also, 3 percent of the U.S. population under age 65 (2 percent of the total population) are potentially subject to the individual responsibility requirement, are currently uninsured and would not be offered financial assistance under the ACA. These people would face a penalty if they did not obtain insurance.

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