Obamacare ‘tax’ to collect $3 billion less than projected

Two million fewer people will pay an Obamacare penalty for lacking insurance in 2016, a $3 billion drop in revenue that government auditors Thursday attributed to the Obama administration’s multiple new exemptions and to changes in the nation’s economic outlook.

The new report by the Congressional Budget Office and Joint Committee on Taxation is likely to drive debate in Washington about the “individual mandate,” which requires most Americans to obtain health insurance if they can afford it.

Auditors initially thought 6 million people would pay a penalty for lacking insurance in 2016, but that estimate has dropped to 4 million.

The government will collect an estimated $4 billion from those who flout the mandate in 2016, with $5 billion coming in each year over the 2017-2024 period, the report said.

Auditors estimated that about 30 million non-elderly Americans will be uninsured in 2016 but a majority of them will be exempt from the penalty.

About 23 million of them will qualify for one of several main exemptions, such as being an illegal immigrant or not making enough money to file a tax return, while some of the remaining 7 million will be excused because the Obama administration extended an array of hardship exemptions.

The individual mandate is one of the law’s most controversial aspects. A high-profile challenge to the rule failed in 2012, when the Supreme Court upheld the penalty under Congress’ authority to tax.

Sen. Orrin Hatch, Utah Republican, responded to auditors’ report by holding up the tax as a financial burden on Americans.

“Under the onerous individual mandate alone, millions of Americans are now expected to pay up to $44 billion more in penalties over the next decade for a mismanaged healthcare law that is barely functional,” he said. “From failed state exchanges to being kicked off their health insurance, American families continue to bear the brunt of bad policy. Democrats and Republicans need to come together to find a new path forward for our families.”