Now that the Supreme Court has upheld the constitutionality of the Affordable Care Act, who will pay the tax for not having health insurance?

CBO answered this in April 2010. They projected that in 2016, when the mandate is in effect and the tax is fully phased in, there will still be 21 million uninsured people.  This belies the advertised “universal coverage” label.

Oversimplifying a bit, for most people the tax in 2016 will be $750 per adult and $375 per kid.

But while 21 million people will be uninsured, CBO said “the majority of them will not be subject to penalty.” That’s an understatement.

You won’t have to pay the tax if:

  • you’re not in the U.S. legally;
  • you’re in prison;
  • you’re poor (measured two different ways);
  • you’re a member of an Indian tribe;
  • you’re in a period of being uninsured that’s less than three months long;
  • your religion forbids getting health insurance; or
  • you get a waiver from HHS.

Given HHS’ behavior in handing out waivers since the law was enacted, this waiver authority bears further observation and scrutiny.

In addition, some who are legally required to pay the tax will not do so.  CBO/JCT therefore assumes a certain amount of noncompliance (aka cheating).

This gets CBO’s 21 million uninsured in 2016 down dramatically to 3.9 million who will be both uninsured and pay the tax.  Total U.S. population in 2016 will be about 327 million. This means that, in 2016:

  • almost 94 out of every 100 people will have health insurance in some form;
  • five out of every 100 will be uninsured and pay no tax;
  • a bit more than one out of every 100 will be uninsured and pay a tax to the government.

If I’m that one person out of 100, I’m going to be pretty ticked off at those five.  All six of us are uninsured but I’m the only one of the six who has to pay higher taxes.

CBO also estimated the income levels of those 3.9 million uninsured who will pay higher taxes.  More than 3/4 of them are not rich.

Income relative to
federal poverty line
# of people
paying tax 
Income range

Income range
(family of 4)

Below poverty 400,000 $0 – 11,800 $0 – 24,000
100% to 200% 600,000 $11,800 – 23,600 $24K – $48K
200% to 300% 800,000 $23,600 – 35,400 $48K – $72K
300% – 400% 700,000 $35,400 – 47,200 $72K – $96K
400% – 500% 500,000 $47,200 – 59,000 $96K – $120K
> 500% 900,000 > $59,000 >$120K
Total 3,900,000


Reading the first line of this table, CBO says that under this law in 2016 there will be 400,000 people below the poverty line who will be uninsured and pay the tax. (More will be required to do so — this is the number who will comply with the law.) Singles in that income range will have annual income less than $11,800, and families of four in that range will have annual income less than $24,000.  These are 400,000 poor uninsured people who will be forced to pay higher taxes.

Similarly, if we add up the rows up to 500% of poverty, we see that under this law there will, in 2016, be three million people with incomes less than $59,000 (singles) or $120,000 (families of four) who will be uninsured and have to pay the tax. These three million people are not rich, they will be uninsured, and they will be required to pay higher taxes. The tax increases on these people, as well as some fraction of those in the “>500%” category, clearly violate the President’s pledge not to raise taxes on anyone earning less than $250K.

Jim Capretta points out that these estimates may be low. In 2010 CBO assumed a mandate enforced by a penalty for noncompliance.  Before today’s ruling, the law created both a legal and a moral obligation to buy health insurance. If you didn’t buy insurance, you would be violating the law and have to pay a penalty to the IRS.  Some people would buy health insurance even though financially it would make more sense for them to just pay the penalty, because they didn’t want to be perceived as breaking the law and paying a penalty.

Chief Justice Roberts’ opinion converts the mandate+penalty into a “pay or play” choice model by turning the penalty into a tax you can choose to pay, without moral opprobrium, rather than buying health insurance.  By removing the “should” implication of the mandate, the Roberts opinion should increase CBO’s estimate of how many people will go uninsured and pay the tax instead.