Many uninsured are ignorant of Obamacare mandate tax and lapsed coverage deadline: survey

More than four out of every 10 people likely to be sanctioned for not having health insurance in 2014 heard “nothing or only little” about the Obamacare tax penalty, according to a new study that underscores the potential backlash administration officials could face from uninsured Americans before the April 15 tax deadline.

Researchers Urban Institute also found that only a quarter of uninsured people with incomes that expose them to the “individual mandate” tax expect to pay the penalty.

Making matters worse, 65 percent of those likely to pay the penalty had either not heard about Obamacare’s insurance exchanges, had heard about them but didn’t know the deadline for signing up, or thought the deadline was in March (it was Feb. 15).

The penalty for lacking insurance in 2014 is the greater of $95 or 1 percent household income above the filing threshold. In 2015, the penalty rises to $325 or 2 percent of income.

Congressional Democrats and advocates worry that people who do not know about the penalty will also have to pay up next year, since the deadline to enroll in 2015 coverage under Obamacare elapsed on Sunday.

Washington State and Minnesota’s state-run exchanges have announced special enrollment periods for penalty payers, although the Health and Human Services Department is still mulling relief for customers in 37 states that use HealthCare.gov.

The Urban institute, with funding from the Robert Wood Johnson Foundation, surveyed people with incomes above the federal poverty level, because poorer Americans were more likely to be exempt from the tax.

The institute concluded that a special enrollment period through the end of tax season would help people learn about the penalty and avoid more hurt in 2015.

“When people file their tax returns, many will learn for the first time about the penalties for not having insurance,” said Kathy Hempstead, director for coverage issues at the Robert Wood Johnson Foundation. “Because of the gap between the deadlines for open enrollment and tax filing, some people will end up paying the penalty two years in a row because they didn’t know this information when they could have acted on it.”