When it was passed into law in 2010 Obamacare created more than $1 trillion in higher taxes on American families and businesses over the course of 10 years. Of the trillion dollars, seven of Obamacare’s tax increases directly hit Americans making less than $250,000 a year, violating President Barack Obama’s “firm pledge” to not raise taxes on the middle class. One of the seven tax increases, the individual mandate, has proven one of the most burdensome for Americans.
The individual mandate will cost $43.3 billion over the course of the next 10 years and prove devastating for taxpayers. The tax penalty gave Americans a choice – purchase “qualifying” health insurance – as defined by President Obama’s Department of Health and Human Services – or pay an income surtax to the IRS. In 2016, the annual fee was $695 for an individual, and $2,085 for a family of four, or 2.5% of your household income, whichever is higher, for “noncompliance.”
In order for Obamacare to work, there needs to be a significant portion of young healthy people to offset the cost of older, less healthy people. For a sustainable Obamacare, 40% of all enrollees need to be in the “golden” 18-34 age. However, Obamacare does not have its 40%. According to HHS, only 28% of enrollees are in this “golden” age range. Because of high costs and one-size-fits all insurances that does not suit the needs of young people, the economics of Obamacare are setup to fail.
For many Americans, going uninsured is a more financially feasible option for their families than paying the skyrocketing costs of Obamacare premiums. Close to 7.5 million taxpayers, or six percent of all filers, opted to pay the individual mandate tax in 2014, more than 25 percent higher than the administration’s highest estimate. As of the fall of 2015, this number increased by 3 million, to 10.5 million Americans.
The lack of healthy, young people on the Obamacare exchanges means insurers are unable to break even and are being forced to pull out of the system. This economic instability of Obamacare caused 1.4 million Americans to have their insurance terminated this year. Major insurance companies, like Aetna Inc., UnitedHealth Group, Inc., and other regional carriers have pulled out of the individual insurance markets. In addition, 17 of the 23 Obamacare exchanges have collapsed leaving millions more without health insurance and putting taxpayers on the hook for $1.8 billion.
According to a HealthDay/Harris Poll, 64% of respondents said that they would like to see the individual mandate provision of Obamacare repealed. The poll revealed that the individual mandate is overwhelmingly unpopular and creates a needless headache for millions of Americans.
Luckily for Americans, Republicans in Congress and President-elect Trump finally have an opportunity to repeal Obamacare and the individual mandate and take the burden of the disastrous healthcare law off of millions of American families.