Individual mandate penalty: Obamacare's most controversial element won't affect many.

Relatively Few Will Actually Pay the ACA's Dreaded Individual Mandate Penalty

Relatively Few Will Actually Pay the ACA's Dreaded Individual Mandate Penalty

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Aug. 7 2014 3:03 PM

Relatively Few People Will Actually Pay Obamacare's Dreaded Individual Mandate Penalty

Chief Justice John Roberts, the man who saved Obamacare.

Win McNamee/Pool/Reuters

Remember the penalty for not following the "individual mandate" to purchase health insurance under Obamacare? According to Affordable Care Act critics, it was an example of government overreach or even tyranny; according to the Supreme Court (barely), it was an acceptably constitutional requirement of the law. As the Wall Street Journal reports today based on research from the Congressional Budget Office and Joint Committee on Taxation, the penalty is also not something that many Americans will actually end up paying by the time the rule takes full effect in 2016—even though, as of now, 30 million people remain uninsured.

The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects.

Four million invididuals are expected to pay the penalty in 2016, the first year it will be charged in its full amount. The fine this year is "$95 per adult, or 1 percent of family income, whichever is greater." That'll go up to $695 per adult or 2.5 percent of family income by 2016, with the penalty capped at the cost of the "national average premium for qualified health plans which have a bronze level of coverage"—which, if I'm reading this correctly, is currently somewhere around $2,400 a year.