When the Supreme Court ruled in June that the new penalty for not obtaining health care was actually a tax (and therefore permissible under Congress’s taxing power) we pointed out that hardly anyone would pay it because low-income families would be eligible for Medicaid, and because subsidies would be available to help make coverage affordable for middle-income families (making up to $90,000 for a family of four).
We also pointed to a study from the Urban Institute and Robert Wood Johnson Foundation concluding that “About 7.3 million people—two percent of the total population (three percent of the population under age 65)—are not offered any financial assistance under the ACA and will be subject to penalties if they do not obtain coverage.”
This week, the Congressional Budget Office (CBO) released estimates that a smaller number than that — 6 million people — would be subject to the penalty for not obtaining health insurance. Naturally, some anti-tax politicians like Governor Bobby Jindal of Louisiana have pounced on this as evidence of a crushing tax increase during the Obama administration.
CBO explains that their previous estimate, that only 4 million people would pay the penalty, had to be revised for several reasons, like continuing gloomy unemployment figures and technical changes. But CBO also says that:
A small share—about 15 percent—of the increase in the number of uninsured people expected to pay the penalty results from the recent Supreme Court decision [which also allows states to opt of the Medicaid expansion that was part of health care reform]. As a result of that decision, CBO and JCT now anticipate that some states will not expand their Medicaid programs at all or will not expand coverage to the full extent authorized by the ACA. Such state decisions are projected to increase the number of uninsured, a small percentage of whom will be subject to the penalty tax.
And who are these governors that will opt to not have their states participate in the Medicaid expansion and thus increase the number of people subject to the penalty for not having health insurance? Well, one of them is Governor Jindal of Louisiana.
Photos of Bobby Jindal via Gage Skidmore Creative Commons Attribution License 2.0