Who pays the individual mandate (in one chart)

September 20, 2012

The Romney campaign held a call with reporters this afternoon. The topic of conversation, per a news release, was "The Costly Disaster That Is Obamacare."

"It's another broken promise," Louisiana Gov. Bobby Jindal told reporters. "Six million Americans will see their taxes increase."

Jindal was referring to a new Congressional Budget Office report, out Wednesday, projecting that 6 million Americans would pay the individual mandate fine — declared a tax by the Supreme Court — for not carrying insurance come 2016. It estimated that the federal government would collect $7 billion that same year.

Who are these people? The Congressional Budget Office broke it down by income level, and the vast majority tend to be on the lower end of the income scale. One in five make between 100 and 200 percent of the poverty line; for an individual, that's somewhere between $11,170 and $22,340. This is an increase from initial projections that only saw 4 million Americans paying the fine. 


The CBO explains the change is due primarily to the changes in the economic outlook, especially the higher-than-expected insurance rate. That explains 85 percent of the increase. The other 15 percent comes from the Supreme Court's decision that states could opt-out of the Medicaid expansion, likely increasing the uninsured rate among those below 133 percent of the poverty line.

That's one way of looking at the numbers. Another is to look at it as a percent of the overall population. The Census Bureau projects that the American population will hit 314 million in 2016. That means you'll have about 2 percent of the population paying the mandate. There will be another 24 million who are uninsured but exempt for various reasons: About a third are illegal immigrants and another third unable to find insurance that costs less than 8 percent of their income.

That's in line with what we should expect from the one other individual mandate we know about: the one in Massachusetts. In 2007, the first year that the state required individuals to purchase insurance, 67,000 Bay State residents (1 percent of the population) paid a fine. That number has continued to drop over the past five years, hitting 44,000 this past year.

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Neil Irwin | September 20, 2012