6M Uninsured Americans to Be Hit with Tax Penalty

Beginning in 2014, nearly six million U.S. citizens are expected to purchase health insurance or face an average tax penalty of $1,200, following a Supreme Court 5-4 decision this past summer that upheld the constitutionality of the Affordable Care Act. In 2010, the nonpartisan Congressional Budget Office projected that four million people would be affected by the tax in 2016 when the penalty goes into full effect. However, due to changes in introductory forecasts about the economy, integrating the effects of new federal legislation, as well as lower wages and higher unemployment, the new estimate is closer to six million Americans. The tax will be collected by the IRS and will raise $6.9 billion in 2016. Part of this money will go toward government aid programs to help middle-class and low-income households afford healthcare coverage.

The Act provides exemptions for low-income people in states that opt out from major Medicaid expansion, and for people with financial hardships, religious objections and certain other circumstances. More than 150 million people are currently covered by employer plans, government programs such asMedicare or private individual policies; therefore, most Americans will not have to worry about the requirement since they are already insured.