According to an estimate by the Congressional Budget Office, approximately four million Americans will pay a penalty in 2016 for not having purchased health insurance.
The recently passed Patient Protection and Affordable Care Act (PPACA) requires all citizens have some type of health coverage. The bill provides a penalty for uninsured persons in higher income brackets.
Those subject to the penalty represent about 20% of the projected 21 million Americans that will continue to lack insurance. Most of the remainder will be exempt from paying a penalty due to low incomes or religious reasons. Members of Indian tribes are also exempt.
If the cheapest health plan available costs more than eight percent of a household’s income, those persons would be exempted from obtaining coverage.
An estimated two-thirds of those subject to a penalty will be eligible for some type of subsidized coverage due to having an income under 400% of the federal poverty level, or $96,000 for a family of four.
In 2016, the penalty will be $695 per each uninsured person in a household or 2.5% of household income, whichever is greater. In subsequent years the penalty would rise based on cost-of-living adjustments.