Uninsured Tax is a Bit Less Than Largest Tax Increase in History

The “uninsured tax is the biggest tax increase in American history” meme is cranking up. CBO has the facts.

They estimate the tax paid by uninsured individuals who fail to purchase health insurance (called Penalty Payments for Uninsured Individuals above, but ruled a tax by SCOTUS yesterday) will equal $54 Billion over 11 years. For perspective, the total of all Federal income and payroll tax receipts for the federal government in FY2012 will be around $2.8 Trillion dollars (1 year). So, $54 Billion over 11 years –what the Supreme Court said yesterday was a tax–is somewhat short of the largest tax increase in American history. The aggregate amount in 2015 will be $3 Billion.

And keep in mind that CBO’s scoring of what would happen if the individual mandate (and the tax) were removed–16 Million fewer persons with insurance coverage, or about half of the net insurance coverage expansion to be achieved by implementing the ACA.

Update: Austin Frakt sends this from Paul Van de Water at CBPP on the same topic. His piece is clearer than mine–about 2 in 100 Americans would face the uninsured tax. The other 98 in 100 would be insured one way or another, or would be exempt from the tax. However, as noted above, CBO says the mandate and tax is key to expanding coverage.

There is a new flourish of “Obamacare” as the worst thing ever, etc pieces. In one sense I admire the tenacity with which Conservatives have bounced back from a defeat. However, I would love to see at least some of the energy Conservatives/Republicans are putting into this effort diverted to saying what they are for. After all, they have had 27 months since the ACA was passed. For example, I would love to see the Commerce committee mark up Jim Capretta and Tom Moffitt’s replace idea (or anything for that matter that was illustrative of their vision for the nation), see what CBO thinks and so on. If they actually then got that to the House floor and passed it, then someone might take the replace part of repeal and replace seriously. They could say on day 1 with a Republican Senate and President Romney we will pass this.

At this point, my conservative health policy friends mostly remind me of post-modern literary scholars–only deconstruction.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to Uninsured Tax is a Bit Less Than Largest Tax Increase in History

  1. Pingback: More on Obamacare not biggest tax increase ever « freeforall

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