By Gene Meyer | Kansas Reporter
FAIRWAY – Crime doesn’t pay, but in some case it may be cheaper than the alternative.
A new federal assessment of the nation’s health care law suggests that some Americans may be better off by not following parts of the plan.
New calculations by the federal Congressional Budget Office estimate that nearly 6 million Americans — 50 percent more than CBO analysts calculated in 2010 — would face tax penalties for failing to obtain health insurance, as the federal Patient Protection and Affordable Care Act requires beginning in 2014.
Higher unemployment than analysts originally considered and lower wages and salaries, as well as other technical adjustments to the original estimate, accounted for most of the increase.
About 900,000 more people are expected to be penalized because of this summer’s U.S. Supreme Court decision, which upheld the act that may allow states to decline expanding Medicaid coverage to more of the uninsured.
Kansas has nearly 365,000 residents without health insurance. Gov. Sam Brownback opposes the federal policy and has vowed to do nothing to further its progress in the state until after the Nov. 6 presidential election.
Neither Brownback’s office nor the Kansas Insurance Department were able to say Thursday what implications the findings could hold for the state.
Analysts predict that middle- and lower-income Americans will pay most of the expected penalties.
About 600,000 of them, or one in 10, already live below the poverty line — less than $12,000 per year for individuals and $24,600 for a family of four, said Will McBride, an economist with The Tax Foundation, a nonpartisan Washington D.C. tax policy research group. About half, or 3 million, live below 300 percent of the poverty line, about the midpoint of U.S. incomes from lowest to highest.
Penalties for not having health insurance will be steep, McBride predicts.
“These low-income families will pay as much as 10 percent of their income,” McBride said. “The relatively few high-income families that will pay this tax will owe a much smaller percent of their income, around 2 percent, making this a highly regressive tax.”
Many families still may find it cheaper to pay the penalties, which are scheduled to start about $285 for families in 2014 and increase to $2,085 or higher by 2016, than to pay than to buy health insurance.
Annual premiums for employer-sponsored family health plans, which usually are less expensive than individual policies, rose 4 percent to $15,745 this year, with workers’ shares of that total rising to $4,316, the Kaiser Family Foundation reported in its latest 2012 Employer Health Benefits Survey .
Premium costs for individual policies vary too widely for easy comparison to employer plans, said Mary Beth Chambers, communications manager for Blue Cross/Blue Shield of Kansas, the state’s largest health insurer.
“But especially in the first year or two, penalties are definitely more cost effective than the premiums,” Chambers said. “But there is a caveat. Don’t get sick.”
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