For about 7 million people, getting health coverage will cost more than paying Obamacare’s individual mandate penalty.
The average penalty for not having coverage in 2016 rises 47 percent to $969, making it a significant factor in whether to buy insurance, according to a new analysis released Wednesday from the Kaiser Family Foundation.
But the penalty varies based on whether the person qualifies for a premium subsidy.
A person who qualifies for subsidies faces an average penalty of $738 per household if they are uninsured in 2016. Those who aren’t eligible, which usually earn a higher income, face an average penalty of $1,450.
Kaiser found that the bronze plan category, the lowest tier of three plan offerings in Obamacare, would cost $0 in premiums, or less money than the individual mandate penalty, for about 3.5 million uninsured. That means those people have no financial reason not to buy a plan.
But the least expensive Obamacare plan would cost more than the mandate penalty for about 7.1 million uninsured Americans, Kaiser said, which means those people have a financial decision to make. The cost of the plan is higher than the penalty with or without subsidies.
There are exemptions for the penalty, such as if you earn a low income.
The Obama administration announced earlier this week that it wouldn’t have a special enrollment period for people who find out they have to pay the penalty, unlike last year. The penalty is paid when people file their tax returns.
Kaiser noted that in order for the individual mandate to spur enrollment in the marketplaces, it needs a prominent place in outreach efforts. But that could be troublesome for Obamacare advocates as the mandate is very unpopular, Kaiser added.
The analysis was based on data from a 2015 current population survey and 2016 Obamacare marketplaces. The current open enrollment ends on Jan. 31. The administration hopes to get 10 million people to sign up and pay for their coverage.
