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Fewer Penalties Tied To Health Insurance Mandate In Mass., But Higher Fines

Slightly fewer Massachusetts residents are paying a penalty for not having health insurance, but those who are paying are seeing higher fines on average.

The state fined 32,106 individuals this year, based on their insurance status in tax year 2018, compared to 33,693 last year. But the average penalty paid this year — $429 — is up nearly 20%, and so is the total amount the state expects to collect overall.

The state Department of Revenue said these numbers will change a bit as taxpayers who forgot to submit proof of insurance do so, as late filers make payments and as the department intercepts refunds.

The federal government repealed the individual health insurance mandate but it's still on on the books in Massachusetts. Four other states and Washington, D.C. reinstated a penalty for failure to have health insurance this year, or plan to do so in 2020.

In Massachusetts, the individual mandate was a pillar of the landmark legislation in 2006 that became a test case for the federal Affordable Care Act. Insurance leaders say the mandate, packaged with subsidies for those who can't afford insurance premiums, has helped Massachusetts maintain the lowest rate of uninsured residents in the country.

"We believe it's proven to be a very effective part of the Commonwealth's effort to make sure residents have access to universal and affordable health insurance coverage," said Audrey Morse Gasteier, chief of policy and strategy at the Massachusetts Health Connector.

Morse Gasteier said the mandate brings more people into the insurance pool, which helps Massachusetts maintain a strong, stable health care coverage market.

The more than $11 million in penalties paid so far this year will be used to subsidize insurance for low- and moderate-income residents. Many of those paying a penalty likely qualify for those benefits.

A Kaiser Family Foundation report said that at least 10,000 uninsured residents in Massachusetts would qualify for free coverage. The state estimates that number is even higher.

Morse Gasteier said more than half of the 250,000 or so residents who don't have health insurance could get free or low-cost coverage because Massachusetts offers more generous subsidies than do other states.

She said there are number of reasons people don't apply.

"They may not believe that they need health insurance coverage, but in many respects, we think it's just a lack of information about how affordable Massachusetts health coverage can be," she said.

That affordability depends on your income and the terms of your insurance plan. Some low- to moderate-income residents say they spend less on premiums than they would paying the penalty. But they're frustrated by how much they have to spend on co-pays, co-insurance or towards their deductible.

The penalties for tax year 2019 range from $264 a year for any individual earning between $18,744 and $24,984, up to $1,524 for someone earning more than $37,476.

The federal deadline for applications has passed but open enrollment continues in Massachusetts through January 23.

This article was originally published on December 31, 2019.

Martha Bebinger Twitter Reporter
Martha Bebinger covers health care and other general assignments for WBUR.

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