People who were uninsured in 2017 would not have to pay the Obamacare penalty as soon as this tax season if Congress passes the Republican tax bill.
And some may even be reimbursed for penalties they paid in past years under the fine known as the individual mandate. Sen. Steve Daines, R-Mont., has filed an amendment that would reimburse Americans who paid the penalty for going uninsured in 2014 and 2015.
The Republican-led Tax Cuts and Jobs Act being considered in the Senate would repeal the individual mandate penalties of 2.5 percent of a person's income, or $695 per adult, whichever is higher.
Most Republicans support the bill, but they need at least 50 votes, assuming a tie-breaking vote by Vice President Mike Pence, to send it to conference with the House. The lower chamber's version did not contain the individual mandate repeal, but President Trump has said he supports the measure.
Polling has shown that the individual mandate is one of the least popular parts of Obamacare, but supporters of the provision say that it helps insurers offer lower rates to customers because it creates an impetus for healthier customers to buy coverage, which helps pay for the costs of sicker, more expensive enrollees. A Congressional Budget Office report has projected that 13 million more people would be uninsured if the mandate is repealed, though the nonpartisan agency said it is re-evaluating the methods it uses. A Standard & Poor's projection pegged the number at 5 million or less.
Opponents say the individual mandate has been ineffective, noting that only half of those the CBO projected to sign up for coverage under the Obamacare exchanges have done so. For many, the cost of health insurance exceeds the penalty, and even some proponents of the mandate said it should have been more strongly enforced and contained fewer exemptions.
The Obama administration created 14 "hardship exemptions" to the mandate, which include the death of a family member, filing for bankruptcy or receiving a shut-off notice from a utility company. People don't have to pay the penalty if their income is low enough to qualify for Medicaid but their state didn't expand the program and if the cost of the lowest-tiered health insurance offered under Obamacare makes up more than 8.05 percent of their income.
About 6.5 million taxpayers paid penalties for failing to have coverage in 2015, according to the IRS. The Census Bureau data for that year shows that 29 million people were uninsured, suggesting that about 22 percent of the uninsured population paid the penalty.