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Only 2 in 100 Americans Will Face Penalty for Not Getting Health Coverage

To hear some critics, you’d think the Supreme Court’s upholding of the individual mandate in health reform means Americans will face a massive, broad-based tax increase.  Grover Norquist of Americans for Tax Reform, for example, stated, “it’s now clear that ‘Obamacare’ is all about taxes and it hits everybody, not just rich people.”

Here’s the reality:  just 2 percent of the population will face a penalty for failing to get health coverage, according to an Urban Institute study.  The other 98 percent either already have coverage, would get coverage under the Affordable Care Act (which would make coverage affordable to many for the first time), or would be exempt from the mandate, the study found.

The benefits of the individual mandate, in contrast, would be widespread, as the Urban Institute study explains:

By encouraging the currently insured healthier individuals to stay in [the individual and small group insurance] markets and attracting newly insured healthy individuals into them as well, the individual [mandate] leads to lower premiums and more stable insurance markets than would be the case without it.

NOTE: For an estimate from the Congressional Budget Office of the number of people who will pay the penalty in 2016, please see CBO Estimates That Only 1.2 Percent of Americans Will Pay Penalty for Not Getting Health Coverage.