CBO Says 6 Million in U.S. to Face Penalty for Lacking Insurance

About 6 million Americans would have to pay a penalty under President Barack Obama’s health-care overhaul for failing to get insurance, the nonpartisan Congressional Budget Office estimated.

The agency said it now expects about 50 percent more people to be subject to the tax than it had previously anticipated. That’s partly because the CBO said it foresees higher unemployment, which translates into more people without employer-sponsored coverage.

It’s also a result of the U.S. Supreme Court decision in June striking down the law’s requirement that states expand their Medicaid programs, which will leave more uninsured Americans subject to the penalty, CBO said.

“The bad news and broken promises for Obamacare just keep piling up,” said House Ways and Means Committee Chairman Dave Camp, a Michigan Republican. “This is yet another example of why we need to repeal this law.”

The overhaul requires most legal residents to have coverage beginning in 2014 or pay a penalty that would be $695 in 2016 or 2.5 percent of a household’s income, whichever is larger. Most people wouldn’t be subject to the tax because they already have coverage, such as through their job.

The law, because it bars insurance companies from discriminating against those with preexisting conditions, is designed to spread the risk and cost of covering those people by requiring almost the entire population to be insured.

“This report confirms that more than 98 percent of Americans won’t be affected by this penalty,” said Erin Shields Britt, a spokeswoman for the Department of Health and Human Services. “Under the law, we’re no longer going to subsidize the care of those who can afford insurance but make a choice not to buy it.”

To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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