How Many Might Have to Pay the Individual Mandate's Fine?

Abstract

On June 28, the Supreme Court upheld the constitutionality of the Affordable Care Act's requirement that individuals either have health insurance coverage or pay a fine. Health Policy Center researchers, using their Health Insurance Policy Simulation Model, estimate that 3 percent of the population under age 65 (7.3 million people) -- all of whom are currently uninsured -- will be required to purchase coverage on their own or pay a fine.

Contact: Stuart Kantor, (202) 261-5283, skantor@urban.org

WASHINGTON, D.C., July 2, 2012—On June 28, the Supreme Court upheld the constitutionality of the Affordable Care Act's requirement that individuals either have health insurance coverage or pay a fine. Whether that fine is considered a penalty (as characterized in the statute) or a tax (as characterized by Chief Justice Roberts) is of less consequence to many Americans than the likelihood they will have to pay it.
In March, Urban Institute researchers used their Health Insurance Policy Simulation Model to estimate the number and share of Americans potentially subject to that fine, assuming full implementation of the ACA tax credits and Medicaid expansions. They found that

• 3 percent of the population under age 65 (7.3 million people) -- all of whom are currently uninsured -- will be required to purchase coverage on their own or pay a fine.
• The remaining 97 percent of those under age 65 break out as follows:
• 58 percent are insured and expected to retain that insurance or something similar to it,
• 33 percent are exempt, primarily because of modest incomes, from the fine (some have insurance and others are uninsured), and
• 7 percent -- the remainder of the currently non-exempt uninsured -- will either be eligible for free or nearly free coverage under Medicaid or the Children's Health Insurance Program, or eligible for tax credits toward insurance premiums in the newly established health insurance exchanges.

Note: Figures do not add to 100 percent because of rounding.
Adapted from "The Individual Mandate in Perspective," research funded by the Robert Wood Johnson Foundation.

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