It's still cheaper to pay Obamacare's "individual mandate penalty" than to buy coverage, even after the Department of Health and Human Services raised the 2015 penalty, an analysis shows.
The
Avalere Health analysis, released Friday, notes that the penalty is simply too low to spur middle-income people to get coverage, adding that this might help explain the "lackluster" enrollment in a special extended period offered to people who discovered the mandate penalty while filing their 2014 taxes.
Only 68,000 people signed up during the
extension; up to 6 million are estimated to owe the
penalty.
For 2014, the fine was the greater of $95 per person or 1 percent of household income;
this year the fine will jump to the greater of 2 percent of income or $325. By 2016, the
average fine will be about $1,100, based on government figures.
"[I]ndividuals earning more than double the poverty level may continue to forgo coverage since paying the fine is still much more affordable than purchasing insurance," Caroline Pearson, senior vice president at Avalere, writes in the analysis.
In one example, the analysis shows that a 27-year-old with income at 300 percent of the poverty level would pay about $2,000 for the lowest-cost subsidized insurance, compared with a penalty of just $345.
But Obamacare "is a good deal" for people making less than 200 percent of the poverty line, or about $23,000, the analysis shows.
Data released previously by Avalere found exchanges using HealthCare.gov had enrolled 76 percent of eligible individuals in 2015 with incomes between 100 percent and 150 percent of the federal poverty level, or $11,770 and $17,655.
"However, participation rates decline dramatically as incomes increase and subsidies decrease," the analysis finds. "For instance, only 16 percent of those earning 301 to 400 percent [of the federal poverty level] picked coverage through an exchange, even though they may be eligible for premium subsidies," the analysis shows.
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